The Federal Reserve held interest rates steady at its January meeting following three consecutive rate cuts amid uncertainty over inflation and economic conditions.

Consumers and traders are waiting to learn if the Fed’s pause is a one-meeting hold or the start of a longer stretch.

The decision reflects a cautious stance as the Fed assesses the direction of inflation and policies President Trump may implement.

It's important to understand that the Fed's decision to pause rate cuts will not directly impact mortgage rates. Mortgage rates are actually driven by a range of factors, including the Fed's rate changes. This week's Fed rate decision does, however, have a big influence on where mortgage rates could head.

The Federal Reserve on Wednesday hit pause on interest rate cuts in its first key decision of President Donald Trump’s second term.

Policy changes: When the Fed adjusts the federal funds rate, it spills over into many aspects of the economy, including mortgage rates. The federal funds rate affects how much it costs banks to borrow money, which in turn affects what banks charge consumers to make a profit.

Economists expect the Federal Reserve to keep interest rates unchanged as its Open Market Committee is set to conclude its meeting on Wednesday afternoon.

After three successive interest rate cuts, the Federal Reserve on Wednesday made no change in its benchmark lending rate amid new economic uncertainties over the outlook for inflation and President Trump's continued threats of new tariffs and other measures.

Federal Reserve governor Michelle Bowman said she still expects declining inflation to allow further interest rate cuts this year, but feels rising wages, buoyant financial markets, geopolitical risks,

U.S. stock index futures held on to their gains on Friday, as an in-line inflation reading did little to alter market expectations about the Federal Reserve's interest-rate path.

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