If you woke up this morning and checked your banking app hoping for a lower mortgage rate or a cheaper car loan, I’ve got some news. Today is Sunday, January 18, 2026. The Federal Reserve is definitely not cutting interest rates today.
Why? Because the Fed doesn't work on weekends. Honestly, they don't even have a meeting scheduled for today.
The big question, is the fed cutting rates today, actually has a very specific answer tied to the 2026 FOMC calendar. The Federal Open Market Committee (the folks who actually push the button on interest rates) isn't scheduled to meet until January 27-28, 2026. So, for the next nine days, the federal funds rate is staying exactly where it is: a target range of 3.50% to 3.75%.
The January 2026 Reality Check
We’re in a weird spot right now. 2025 was a bit of a rollercoaster for the central bank. After holding rates steady for what felt like forever, they finally started trimming. They cut rates three times in the back half of 2025—September, October, and December—dropping the benchmark rate by a total of 75 basis points.
That brought us to the current 3.50%-3.75% range.
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But if you’re expecting another cut on January 28, you might want to temper those expectations. Even though the Fed has been in a "cutting mood," the internal vibe at the Eccles Building is shifting toward a pause. Federal Reserve Chair Jerome Powell recently hinted that the Fed has done enough for now to "bolster the threat to employment" while keeping rates high enough to squash the last bits of inflation.
Basically, they want to wait and see.
Why the Fed is Hesitating Right Now
It's not just about one number. It’s a messy soup of data. The "dot plot"—that famous chart where Fed officials hide their anonymous predictions—suggests only one 25-basis-point cut is likely for the entire year of 2026.
That is a huge disconnect from what some folks on Wall Street are shouting.
- Economic Growth: GDP is actually looking pretty solid, projected to hit around 2.3% this year. When the economy is growing like that, the Fed usually doesn't feel the need to rush more cuts.
- The "K-Shaped" Problem: We’re seeing a weird split. Higher earners are doing fine, but lower-income households are feeling the squeeze of higher costs for basics.
- Sticky Inflation: PCE inflation (the Fed's favorite flavor of inflation data) is expected to hover around 2.4% by the end of 2026. That’s still above their 2% target.
- Political Pressure: With a new administration in the White House and looming personnel changes at the Fed—including the expiration of Governor Stephen Miran’s term—there's a lot of noise.
Jan Hatzius over at Goldman Sachs Research has been saying they expect a "pause" in January. They’re betting the Fed waits until March or June to move the needle again. It’s a "slow and steady" approach that feels a bit like watching paint dry if you're waiting for a cheaper refi.
What This Means for Your Wallet Today
Since the Fed isn't moving today, your high-yield savings account is still earning decent interest. On the flip side, credit card APRs and mortgage rates aren't dropping overnight.
Mortgage rates actually took a bit of a tumble last week, hitting their lowest points since 2022, but they’ve started to flatten out. Investors are already pricing in the "January Pause." If the market thought a cut was coming on the 28th, you’d see those bond yields sliding much faster.
One thing people often get wrong: the Fed doesn't control mortgage rates directly. They control the short-term "overnight" rate. Mortgage rates follow the 10-year Treasury yield, which is basically a giant betting machine on where the economy is headed over the next decade.
Actionable Steps to Take While the Fed Pauses
Stop waiting for the "perfect" rate. It usually doesn't exist. Instead, focus on what you can control while the Fed sits on its hands this month.
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- Lock in Your Savings: If you have cash in a high-yield savings account, keep an eye on the APY. If the Fed does signal more cuts in March, those rates will drop fast. You might consider a short-term CD (Certificate of Deposit) to lock in a 4% or higher rate now.
- Review Variable Debt: If you have a HELOC or a variable-rate credit card, don't count on a January rate cut to save you. Look into balance transfer offers or fixed-rate personal loans if the interest is eating you alive.
- Watch the January 28 Statement: Set a calendar alert for the afternoon of January 28. Even if they don't cut rates, the language they use will tell us everything. Look for words like "neutral value" or "patient." If they say they are "well positioned to wait," expect rates to stay high through the spring.
- Prepare for the New Fed Chair: Jerome Powell’s term ends in May. The name that drops from the White House—whether it's Kevin Hassett or Kevin Warsh—will move markets instantly. New leadership often means new policy directions.
The bottom line? The Fed is in a "wait and watch" mode. They've spent the last few months cooling the engines, and now they want to see if the plane is still flying level. Don't expect any movement today, and maybe don't hold your breath for the end of the month either.