Following three 25-point cuts in the second half of 2025, the Federal Reserve chose to hold interest rates steady, though housing activity remains “weak.”Key points: As was widely expected, the Federal Reserve left interest rates unchanged following its January 27-28 meeting, though two committee members dissented. The Federal Reserve is leaving short-term interest rates unchanged, a decision that many economists anticipated ahead of the central bank's first meeting of 2026. What could prompt another rate cutMoving forward, "a weakening labor market would be an argument" for lowering rates, Powell said. "Until there is further economic data to support another rate cut, they will keep the Fed Funds rate as is," she predicted. Since the Fed wasn't expected to cut short-term interest rates, economists aren't anticipating significant movement in mortgage rates.