Fed Holds Steady: Interest Rates to Remain Stable Through 2028

According to the Federal Reserve's recent projections, interest rates are expected to remain steady for the next two years, from 2026 to 2028. Currently, the main interest rate is sitting between 3.50% and 3.75%, and the Fed has decided to keep it there. The economy is sending mixed signals, with inflation still higher than desired, but employment rates are good.

The Fed's 'dot plot' suggests that they might raise rates a little by the end of 2026 before slowly lowering them through 2027 and 2028. However, not everyone at the Fed agrees exactly, so there is a range of possible outcomes.

Markets seem to think rates might go up more than the Fed predicts, possibly climbing to around 4.1% by mid-2027, and staying high for a while. This could affect mortgage rates, making monthly payments feel even bigger. By 2028, when rates might be lower, mortgage rates could be in the mid-to-high 5% range.