The Federal Reserve left interest rates unchanged on Wednesday. The Federal Open Market Committee decided to maintain the target range for the federal funds rate at 3.75% to 4%, by a 10-2 vote. Lisa D. Cook and Beth M. Hammack voted against, preferring a quarter-point increase, according to the Fed’s statement. The statement says inflation “remains elevated.”
For most households, a hold means little changes overnight. But the two dissents matter, because they show that some officials wanted to keep raising rates. Here is what the decision means for the money you save, borrow and owe. For the minute-by-minute record of the day, see our Fed rate decision live coverage.
What a hold means for savings accounts
Banks set savings rates themselves, but they tend to follow the Fed’s range over time. With the range unchanged, there is no new push from the Fed for banks to raise or cut what they pay. Rates at online banks can still differ widely from the national average, and those offers can change at any time without a Fed meeting.
The practical step is to compare. Our look at savings rates after the September hike shows how far the best accounts sit from the typical big-bank account. If your money is sitting in an account that pays close to nothing, a hold is not a reason to wait. Check that any account you open is FDIC-insured, and read the terms on promotional rates, which often expire.
What it means for credit cards
Most credit cards carry a variable APR tied to the prime rate, which moves with the Fed’s range. Because the range did not change, the prime rate and your card’s APR should not change as a result of this meeting either. That is not the same as good news: rates remain at the higher level set by the Fed’s earlier increase, so carrying a balance is still expensive. Our reporting on the average credit card APR shows how much more people who carry a balance pay.
If you carry a balance, the most reliable way to reduce interest is to pay it down, ask your issuer for a lower rate, or move it to a card with a lower introductory rate, mindful of transfer fees. A hold does not change that math.
What it means for mortgages
Mortgage rates do not move in lockstep with the federal funds rate. Long-term mortgage rates follow longer-term Treasury yields and what investors expect the Fed to do next, so they can move on a day when the Fed does nothing. That is why a hold can still come with a change in the mortgage quote you see online. Our explainers on mortgage rates and the 10-year Treasury yield cover what drives those quotes.
If you are shopping for a home loan, get quotes from several lenders on the same day and compare the annual percentage rate and fees, not just the headline rate. Whether to lock a rate depends on your closing date and your tolerance for risk, and a lender can explain the lock options available to you.
What to watch before December
The Fed’s next meeting is December 8 and 9. Between now and then, the inflation and jobs reports will shape what officials do. The two dissents are a signal that the debate inside the committee is about whether to raise rates further, not whether to cut them. Nobody outside the Fed can say how that debate will end, so it is better to plan around your own budget than around a forecast.
A few steps are worth taking whatever the Fed does next: move idle cash to an insured account that pays a competitive rate, pay down variable-rate debt first, and keep an emergency fund that you can reach quickly. Our Fed rate decision explainer goes through how each kind of account and loan responds to the Fed’s moves.
This is general information, not financial advice. Rates and terms vary by lender, and your situation may differ.
