The Federal Reserve is expected to keep its key interest rate steady on Wednesday despite continued pressure from President Trump to further cut rates.
That means borrowing costs on many consumer loans, from home equity loans to credit cards, are likely to remain stable for a while, while returns on savings accounts are less likely to fall further, benefiting cash-strapped households.
The Federal Reserve’s job is to keep prices under control and workers employed. With inflation still above the central bank’s targets and the labor market somewhat stable, the Fed appears unwilling to cut rates further, especially after three quarter-percentage point rate cuts last year.
“The timing of further rate cuts in 2026 will depend on whether recent progress in reducing inflation continues,” said Charlie Wise, senior vice president of research and advisory at TransUnion, a major consumer lending firm, “as well as the continued health of the employment situation.”
The interest rate discussion has been overshadowed by the escalation of Trump’s ongoing crusade for greater influence over the Fed – and the significant threat it poses to the central bank’s independence. Most recently, the Trump administration launched a criminal investigation into Jerome H. Powell, his Fed chairman nominee in 2017, over renovation costs at the Fed headquarters. The investigation was denounced by lawmakers and former Fed chairs of both parties as an overreach of the president’s authority.
The Fed’s key interest rate, known as the federal funds rate, is currently between 3.5 and 3.75 percent and serves as a benchmark for interest rates on various loans and other financial instruments throughout the economy.
Here’s a look at the current status of various tariffs.
Credit cards
Cardholders who carry balances have seen a decline in interest on their debt in recent months, but it hasn’t been enough to make a significant impact on their monthly budgets. (When the Fed cuts rates, card issuers are generally slower to respond and changes may take a few billing cycles.)
According to Bankrate, which tracks more than 100 popular new card offers from the 50 largest banks, the average credit card interest rate was 19.62 percent last week. This is down from the record high of 20.79 percent in August 2024.
Mr. Trump recently called for a one-year cap to limit credit card fees to 10 percent, but that would almost certainly require Congress to pass a law. Although capping interest rates received some bipartisan support from lawmakers, Republican leaders showed little interest in taking up the issue.
Mortgages
Interest rates on 30-year fixed mortgages do not move in line with Fed funds rates; Instead, they are generally guided by the 10-year Treasury yield, which is influenced by a variety of factors, including Fed actions, inflation expectations and general investor sentiment.
There is another factor that could lower interest rates. Mr. Trump has ordered Fannie Mae and Freddie Mac, the two quasi-governmental entities that guarantee or buy many mortgages, to begin purchasing up to $200 billion in mortgage-backed bonds. If Fannie and Freddie became buyers of these mortgage-backed securities, it could drive up the prices of the bonds — and lower mortgage rates somewhat. (Bond prices move inversely to interest rates.)
According to Freddie Mac, the average interest rate on a 30-year fixed mortgage was 6.09 percent as of Jan. 22, down from 6.96 percent a year ago.
Other home loans are more tied to the central bank’s decisions. Home equity lines of credit and adjustable-rate mortgages that have variable interest rates generally adjust within two billing cycles of a change in Fed interest rates.
Car loans
Higher car prices coupled with higher loan interest rates continue to make affordability difficult for many Americans, while many lower-income households struggle to make repayments on their existing car loans. But wealthy shoppers kept buying while many “price-conscious shoppers were pushed to the sidelines,” said Jessica Caldwell, head of insights at Edmunds.
Auto loans tend to be based on the yield on the five-year Treasury note, which is influenced by interest rate movements from the Fed. But other factors also determine how much borrowers actually pay, including creditworthiness, type of vehicle, loan term and down payment. Lenders also consider the extent of borrowers’ delinquency on auto loans. As these rise, interest rates also rise, making qualifying for a loan more difficult, especially for those with lower credit scores.
According to Edmunds, an auto shopping website, the average interest rate on new car loans was 6.5 percent in December, down slightly from 7 percent in the summer and 6.6 percent in December 2024.
Interest rates on used cars were higher: the average loan had an interest rate of 10.5 percent in December, only slightly lower than the 10.8 percent in December 2024.
Savings accounts
Everything from online savings accounts and certificates of deposit to money market funds tend to move in line with the Fed’s policy changes. That means interest rates on high-yield savings accounts have trended down recently, but they still pay far more than interest rates on traditional savings accounts, which remain paltry.
The national average interest rate for savings accounts was recently 0.61 percent, according to Bankrate, while the best high-yield savings accounts pay around 4 percent.
The average return of the Crane 100 Money Fund Index, which tracks the largest money market funds, was 3.5 percent as of Jan. 26, down from 3.73 percent on Dec. 9 and 5.13 percent at the end of June last year.
Student loans
There are two main types of student loans – government and private.
Most people turn to federal loans first. Their interest rates are fixed for the entire life of the loan, they are much easier to get for teenagers and their repayment terms are more generous.
Over the past year, federal student loan interest rates have decreased slightly for funds borrowed from July 1, 2025 to June 30, 2026. (These rates reset on July 1 each year and follow a formula based on the May 10-year Treasury bond auction.)
The interest rate for student loans is now 6.39 percent, compared to 6.53 percent last year. Interest rates on graduate and professional loans fell from 8.08 percent to 7.94 percent, while interest rates on PLUS loans – additional financing for graduates and parents of students – fell from 9.08 percent to 8.94 percent.
Private student loans are more of a wild card. Students often need a co-signer, rates can be fixed or variable, and much depends on your creditworthiness.