Fed Watch Live Blog: What Happened at Today's Federal Reserve Meeting?

The Fed is seeing progress toward its inflation target, but not enough to cut rates yet. 

Inflation data has been good recently, but Q1 of 2024 was poor, said Shang Saavedra, a CNET expert review board member and founder of Save My Cents. "Powell states that they need to see more good data to gain confidence." 

Saavedra pointed out that the Fed is focusing on bringing inflation down to 2% and achieving maximum employment. "They didn't mention much about GDP growth, so it's really those two metrics that matter the most to them at this point," she added. 

"What's most important about today's decision is how the Fed perceives the economy to be trending going forward," said Saavedra. "The US does not appear to be headed for a hard recession, which should be good news for everyone." 

The Fed didn't cut or hike interest rates this time around, but higher or lower interest rates could affect how you save and borrow money. But what does it really mean if your interest rates change? Check out this video to help clear it up.

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Federal Reserve meetings give the central bank the chance to speak about the state of the economy and future policy changes, both of which influence the direction of mortgage rates. 

Even though there was no interest rate cut today, Fed Chair Jerome Powell did say that a rate change "could be on the table" at its next meeting on Sept. 18. Inflation has continued to moderate, which should give the Fed confidence to start lowering rates without fear of overheating the economy again. 

Still, a single rate cut won't be the antidote for today's unaffordable housing market. 

"A quarter-point drop in the federal funds rate doesn't equal a quarter-point drop in mortgage rates," said Jeb Smith, a licensed real estate agent and member of CNET Money's Expert Review Board. 

That said, cooling inflation and future rate cuts should bring homebuyers some relief when it comes to borrowing costs. It might just take longer than many of us had hoped.

A high interest rate on your credit card can make it difficult to keep up with payments, which is likely contributing to the increase in credit card delinquencies. But you shouldn't bank on rate cuts this year to try to lower your credit card debt. 

"We've made no decisions about future meetings," Fed Chair Jerome Powell said in today's press briefing. The Fed is waiting to see more data on inflation and employment before deciding whether to cut rates in September. 

Instead, focus on making your minimum payment, consider consolidating your debt into a lower-interest loan or reassess how you use your credit cards for daily spending. 

Read more: Continued Interest Rate Pause Makes It Hard to Pay Down Credit Card Debt

Fed Chair Jerome Powell isn't known for being particularly effusive in his press conferences following Federal Open Market Committee meetings. But compared to earlier this year, he sounded a lot more positive about the economy today.

He noted that the Fed continues to see progress on inflation, which has "come down much closer to our goal."

Though unemployment has ticked up, he noted, it is still historically low. And wages are coming down from their pandemic highs, but "increases are still at a strong level."

"It's exactly the pattern we want to be seeing," Powell said.

Overall, Powell said the economy "is so much better than where we were a year ago."

And, if the economy keeps heading in the same direction, a rate cut could be on the table at the September meeting. 

The Federal Reserve opted to hold rates steady once more, which means your credit card's APR isn't going down. Steep interest rates make it challenging to pay off credit card debt. If you're struggling to make even your card's minimum payment, don't wait for an interest rate cut to seek financial assistance, said credit expert Gerri Detweiler.

"Reach out to a professional for help. Look for someone credentialed who has been helping consumers get out of debt for a long time," Detweiler said.

Getting out of debt isn't an instantaneous process. "Watch out for promises of quick solutions to your debt problems, especially if they charge high costs," she added. It'll take time and effort on your end, but it can be done.

Since the Fed is holding interest rates steady, yields for certificates of deposit should remain attractive, according to Bola Sokunbi, a certified financial education instructor. This makes it a good time to earn a return on the money you set aside. 

Just make sure to consider the CD term, the length of time your savings are locked in. 

"Short-term CDs will continue to have good rates and offer flexibility," said Sokunbi. "You can access your money sooner without penalties." 

Based on CNET's weekly tracking, six-month CDs have an average 4.69% annual percentage yield. CDs with longer terms have slightly lower rates averaging 3.98% for five-year terms. 

Sokunbi said locking in a long-term CD could also be a smart move if you're mindful of the early withdrawal penalties. But if you open a CD at a bank that later raises the rate, you'll miss out on a bigger return. With no clear sign of when the Fed will lower rates, there's no way to know for sure when banks will drop CD rates. 

"To play it safe, consider CD laddering, which helps spread out your risk and optimize returns," she said. 

Even though the Federal Reserve doesn't control mortgage rates, its actions can significantly influence home loan rates. 

Today's decision by the Federal Open Market Committee to leave interest rates unchanged wasn't surprising. Though the Fed has said it's prepared to lower interest rates this year, it would like to see inflation moderate further before making any cuts. 

That being said, we may not have to wait much longer. Some financial experts say the first rate cut since 2020 could come as soon as September. Other economists believe we'll see lower interest rates closer to December. 

In the interim, mortgage rates will continue to fluctuate daily. Two more inflation readings and several labor reports will be released before September. If data continues to show a weakening economy, that should help mortgage rates stabilize or trend slightly lower. 

Once the Fed starts cutting interest rates, it will happen incrementally over several years. Home loan rates will inch lower, but homebuyers shouldn't expect dramatic drops. 

According to Robert Dietz, chief economist at the National Association of Homebuilders, the average rate on a 30-year fixed mortgage could fall just below 6% by the end of next year. 

Read more: How the Federal Reserve Affects Mortgage Rates in 2024

To no one's surprise, the Fed decided to hold rates steady again at today's Federal Open Market Committee meeting. What does that actually mean for your money? Interest rates for borrowers, like when you take out a loan or use credit, will remain expensive. Interest rates for savers, like when you deposit money into a high-yield savings account or CD, will continue to offer solid returns.

If you've ever wondered why your credit card APR is high or why the rate on your high-yield savings account fluctuates, you've come to the right place. The Fed's rate decisions can impact everything from affording a mortgage to how much debt you have to repay. So, it's worth knowing how much influence the Fed has on your finances.

Read more: Today's Fed Decision: Why Interest Rates Matter for Your Money

The Federal Reserve voted to hold interest rates steady again. However, today's statement from the Federal Open Market Committee meeting includes language signaling that rate cuts could come as soon as September.

The Fed's statement notes it has made "some further progress" on inflation -- that's Fed-speak for "inflation is going down" -- and job gains have "moderated." A combination of slowing inflation and a weaker labor market could convince the Fed to shift its monetary policy at its next meeting on Sept. 17-18.

For now, the federal funds rate remains at a target range of 5.25% to 5.50%, which is the highest it's been in 20 years. If the central bank decides to lower interest rates, the first cut will likely be minimal: a quarter of a percent. While a series of cuts could still be on the agenda going into next year, you won't see an immediate difference in interest rates if you're applying for a mortgage or paying off credit card debt in 2024.

Fed Chair Jerome Powell will give a press conference at 2:30 p.m. ET (12:30 p.m. PT). His opening remarks should give a better sense of how the Fed is assessing the economy and when interest rate cuts are on the horizon.

However, don't expect to hear explicit promises like, "We'll cut interest rates in September." The Fed is big on subtlety. 

Read more: Fed Meeting Today: No Interest Rate Cut, but September Looks Promising

Federal Reserve Chair Jerome Powell will hold a press briefing today at 2:30 p.m. ET (11:30 a.m. PT) following the Federal Open Market Committee meeting. You can tune in on YouTube or on the FOMC website to hear him discuss the Fed's decision regarding rate cuts, talk about key economic factors and take questions from the press. We'll be watching, too. 

Read more: How to Watch Today's Fed Meeting

The Fed has left interest rates unchanged for a year, and there's no clear sign of that changing today. If rates stay high, so could the cost of borrowing, said Bola Sokunbi, a certified financial education Instructor and member of CNET Money's Expert Review Board. 

"This can impact people's everyday spending and saving," said Sokunbi. "Higher interest rates on mortgages, car loans and credit cards can discourage borrowing and reduce discretionary spending." Since rates could remain elevated, high yields on savings accounts could encourage people to save more, she added. 

Most of us are still feeling the burn of inflation, whether at the grocery store or gas pump. 

According to a recent CNET Money inflation survey, an overwhelming majority of US consumers -- 93% -- are concerned about high prices. Experts don't expect the Fed to cut rates today, meaning inflation is still a concern for the central bank, as well. 

With the cost of everyday essentials, higher energy bills and back-to-school season, expenses are adding up quickly. Over half of those surveyed are cutting back on nonessential spending, putting less toward long-term goals, holding off on major vacation plans and investing less in retirement and property. 

Keep a close eye on your spending and stick to your budget. You may be able to cut costs by looking for alternatives to activities and items. For instance, shop your pantry and fridge before going to the grocery store, and opt for a movie night at home instead of going out.

Read more: Worried About Inflation? 93% of Americans Are Too, CNET Survey Finds

Mortgage rates fluctuate constantly in response to economic data, adjustments to monetary policy and geopolitical events. Although the Federal Reserve doesn't set mortgage rates directly, its actions influence credit markets, which in turn affect rates for mortgage loans.

Up until mid-June, average mortgage rates were at or above 7%. Following signs of weaker inflation and employment, mortgage rates have seen some improvements. 

Today, the average rate for a 30-year fixed mortgage is 6.85%, down by 0.02% compared to the previous week, according to data from CNET's sister site Bankrate.

The direction of mortgage rates hinges on incoming economic data and the timing of the Fed's interest rate cuts. If the Fed speaks favorably about the economy today, there's a good chance mortgage rates could moderate further in the near term.

"Mortgage rates will move with the rate of inflation," said Melissa Cohn, regional vice president of William Raveis Mortgage and a member of CNET Money's Expert Review Board. 

If progress on inflation stalls or the labor market heats up again, rate cuts will be put on the back burner and mortgage rates could push higher. 

Read more: Today's Mortgage Rates on July 31, 2024

Experts predict the Fed will interest hold rates steady one more time today. 

"That means we're looking at those same crusty, dusty mortgage interest rates, high credit card interest rates, and even auto loans," said Rita Soledad Fernández Paulino, founder of Wealth Para Todos and another member of our Expert Review Board. 

Fernández Paulino, who goes by Soledad, said if the Fed holds rates steady, borrowing will be challenging, but savings rates will remain favorable. For instance, Series I bonds have a 4.28% interest rate until October, and that's Soledad's threshold for finding high yields for savers right now. "I always like to compare it to the Series I bonds rate first," said Soledad. "So anything that is above 4.28% is good right now." 

The Federal Reserve Open Market Committee concludes its two-day meeting today. While you shouldn't expect a rate cut, here are some clues to look for.

If the central bank interprets inflation data as cooling substantially, Fed Chair Jerome Powell could drop hints toward a future interest rate cut in September. During the postmeeting press conference, Powell's language is often decoded by economic experts. Look for references to "moderating" or "easing" monetary policy as opposed to "tightening."

In an attempt to rein in runaway inflation, the Fed has hiked the federal funds rate 11 times since early 2022. The current target range of 5.25% to 5.5% is the highest it's been in 20 years.

While just one interest rate cut won't significantly alter the cost of borrowing, it could signal more rate cuts down the road. Lowering interest rates on a consistent basis could finally bring some relief to those looking to take out a new loan or mortgage, or trying to pay off high-interest credit card debt. 

Check back with our live blog all day for complete coverage of the Federal Reserve meeting, as well as Powell's press conference at 2:30 p.m. ET (12:30 p.m. PT). 

Read more: The Fed Votes on Interest Rates Today. Here's Why You Shouldn't Expect a Cut, for Now