Fed cuts rates: What's next for mortgages, credit cards, car loans

Forecasts vary for how many more times the Fed could cut interest rates in 2026. Some say one, two or even three more rate cuts ahead.

Mortgage rates already have fallen as markets anticipated a Fed rate cut in December.

Cantankerous and increasingly cautious consumers — perhaps put on edge by seemingly shrinking paychecks, a weaker job market and stubbornly high prices — gave the Federal Reserve more room to cut interest rates for a third time in 2025.

On Wednesday, Dec. 10, the nation's central bank cut short-term interest rates by a quarter percentage point. The Fed's December rate cut drove the short-term federal funds rate to a target range of 3.5% to 3.75%.

The Fed noted in its statement that "job gains have slowed this year, and the unemployment rate has edged up through Sept