Consumers and traders are waiting to learn if the Fed’s pause is a one-meeting hold or the start of a longer stretch.

The decision reflects a cautious stance as the Fed assesses the direction of inflation and policies President Trump may implement.

The Federal Reserve on Wednesday hit pause on interest rate cuts in its first key decision of President Donald Trump’s second term.

Economists expect the Federal Reserve to keep interest rates unchanged as its Open Market Committee is set to conclude its meeting on Wednesday afternoon.

It's important to understand that the Fed's decision to pause rate cuts will not directly impact mortgage rates. Mortgage rates are actually driven by a range of factors, including the Fed's rate changes. This week's Fed rate decision does, however, have a big influence on where mortgage rates could head.

Federal Reserve governor Michelle Bowman said she still expects declining inflation to allow further interest rate cuts this year, but feels rising wages, buoyant financial markets, geopolitical risks,

The Federal Reserve is widely expected to hold its key interest rate steady on Wednesday as officials wait for more data that indicates inflation is cooling.

Policy changes: When the Fed adjusts the federal funds rate, it spills over into many aspects of the economy, including mortgage rates. The federal funds rate affects how much it costs banks to borrow money, which in turn affects what banks charge consumers to make a profit.

Trump said Powell and the Fed "failed to stop the problem they created with inflation" in a post on Truth Social on Wednesday.

After the inflation report, released at the same time as hawkish monetary policy remarks from Fed Governor Michelle Bowman, traders of futures that settle to the Fed's policy rate priced in about a 70% chance that the short-term borrowing rate will be 4.