Fed keeps rates unchanged: what it means for mortgages, credit cards and loans

Group 1: Federal Reserve's Interest Rate Decision - The US Federal Reserve has left interest rates unchanged, maintaining the federal funds rate in a range of 3.5% to 3.75%, indicating a cautious approach amid mixed economic signals [1][2] - The decision was made with a 10–2 vote, with dissent from two governors advocating for an immediate quarter-point rate cut [2] - Economic activity is expanding at a solid pace, but inflation remains somewhat elevated, and the unemployment rate has begun to stabilize [2] Group 2: Mortgage Market Dynamics - Fixed-rate mortgages do not directly follow the Federal Reserve's decisions but are influenced by long-term Treasury yields, which are affected by inflation expectations and global investor sentiment [3] - The average 30-year fixed mortgage rate is currently at 6.17%, which is higher than many buyers anticipated a few months ago [4] - Even with potential rate cuts from the Fed, mortgage rates may not decrease as expected, as seen in the second half of 2025 [4][5] Group 3: Consumer Borrowing and Credit Rates - Credit cards and variable loans are linked to the prime rate, which is currently at 6.75%, and the average credit card interest rate has fallen to 23.79% [6][8] - Despite the Fed's rate cuts, credit card rates have only declined modestly, with companies delaying the full benefit to customers [7] - High-yield savings accounts are offering attractive rates of 4% to 5% APY, significantly higher than the national average savings rate [8]