Federal Reserve Holds Rates Steady as Inflation Cools

The Federal Reserve held its benchmark rate steady at 3.5% to 3.75% in January 2026. The Consumer Price Index rose 2.4% year-over-year, the slowest pace since May 2025. Core CPI increased 2.5% annually, the lowest since April 2021. Forecasts suggest gradually lower rates into 2026, with 30-year mortgage rates potentially ending around 5.9%. Lower rates benefit borrowers through reduced mortgage and loan costs, but savers will see declining yields on savings accounts, CDs, and money market funds.