Yes, the Federal Reserve raised interest rates by a 1/4 percentage point (25 basis points) on May 3, 2023, bringing the target range for the federal funds rate to 5%–5.25%. This increase marked the tenth consecutive hike in an effort to combat inflation, with officials signaling a potential pause for the remainder of the year.
The next Federal Reserve (FOMC) meeting, where they decide on interest rates, is scheduled for January 27-28, 2026, with the announcement typically coming on the final day, January 28th. Following that, the key dates for 2026 FOMC meetings are in March (17-18), April (28-29), June (16-17), July (28-29), September (15-16), October (27-28), and December (8-9).
Mortgage rates are forecast to decline in 2026, improving housing affordability, but challenges persist for prospective buyers.
J.P. Morgan predicts Fed will not raise interest rates until 2027. J.P. Morgan projects interest rate hikes in 2027, other banks delay cuts until 2026. WASHINGTON – J.P. Morgan expects the next monetary policy move by the US Federal Reserve to be an interest‑rate hike in 2027.
As expected, the Fed on September 17 approved a quarter-point rate cut, bringing its benchmark rate to a range of 4.00%–4.25%. The vote was 11 to 1, with one Fed governor preferring a deeper half-point cut.
Over the course of 2025, since Trump took office, rates have dropped from 6.96% to a recent low of 6.17%, she added, which explains why the yearly cost of a mortgage has trended lower over Trump's term. The 30-year mortgage rate stood at 6.22% as of Dec.
Fed cuts in October
The Federal Reserve made its second federal funds rate cut of 2025 in October. Despite gains in the latest inflation reading, the administration's weakening labor market and elevated economic chaos were enough for the central bank to make the quarter-point cut.
Yes, the Federal Reserve did cut interest rates three times in late 2025 (September, October, December), reducing the federal funds rate by 75 basis points to 3.50%-3.75% to support a softening economy and weaker labor market, with expectations for further cuts in 2026 but a pause in early 2026 as the market balanced growth and inflation concerns, according to Chase Bank and The Motley Fool.
Money markets are signalling that rates could fall to 3.5% by April 2026, with around an 80% chance of a cut to 3.25% by November. Economists at Capital Economics forecast interest rates will be cut from 3.75% to 3% in 2026.
While statistical evidence doesn't support the phenomenon that stocks trade lower in October, the psychological expectations for the October effect still exist. The October effect, however, tends to be overrated. Despite the moniker, this seeming concentration of dark market days is not statistically significant.
Current U.S. Inflation Rate is 2.7%: Chart and Why It Matters. For the 12 months ending December 2025, the inflation rate was 2.7%.
A good interest rate for a mortgage is about 4.75%. It is lower than the current average rates for both a 15-year fixed loan and a 30-year mortgage, which makes it favorable. In November 2022, the average 30-year fixed rate was 6.61%. This indicates that 4.75% is a good rate for borrowers seeking a mortgage.
Trump wants interest rates to fall sharply so the government can borrow more cheaply and Americans can pay lower borrowing costs for new homes, cars or other large purchases, as worries about high costs have soured some voters on his economic management.
The Fed rate (Federal Funds Rate) is the overnight lending rate banks charge each other, set by the Federal Reserve, while the Prime Rate is the base rate banks charge their best customers, typically around 3% higher than the Fed rate and used for loans like credit cards and HELOCs. The Fed influences the prime rate by setting the federal funds rate, but individual banks determine the prime rate, which acts as a benchmark for many consumer and business loans.