Fed & Interest RatesPublished Mar 19, 2026 · covers Feb 1, 2026

Fed Holds Rates at 3.64%, Pauses After Five Straight Months of Cuts

4 min read

Fed Funds Rate

3.64%February 2026

Prev 3.64% (January 2026)

The Fed Read

The Fed kept its benchmark rate at 3.64% in February, hitting pause after cutting rates five months in a row. Unemployment rising to 4.4% tilts the case toward cutting rates, but inflation still running positive shifts the Fed toward waiting for more data first.

For You

HYSA yields are likely to stay flat because the Fed isn't cutting rates, so banks have no pressure to raise what they pay savers. Mortgage rates are also holding steady because lenders' own borrowing costs won't drop until the Fed starts cutting again.

What Happened

The Federal Reserve left its benchmark interest rate unchanged at 3.64% in February, pausing a cutting cycle that had trimmed rates by nearly 0.70 percentage points since last fall. After five consecutive months of cuts, the Fed is signaling it wants to see more data before moving again. That pause carries real weight for anyone who borrows money or owns investments. The Fed held its benchmark rate at 3.64% at its February 2026 meeting, ending a five-month run of consecutive cuts. Between September 2025 and January 2026, the central bank had lowered rates by roughly 0.69 percentage points as inflation showed signs of cooling. The unemployment rate ticked up to 4.4%, suggesting the labor market is softening — which typically argues for continued cuts. At the same time, inflation as measured by CPI remained positive, giving policymakers reason to pause and assess whether prior cuts are having the intended effect.

Core Stats

Indicator	Period	Current	Previous
Fed Funds Rate	February 2026	3.64%	3.64%
10Y Treasury	March 6, 2026	4.15%	4.13% prior
2s10s Spread	2026-01-30	▲+0.74	+0.71
Market Rate Expectation

Source: Federal Reserve Economic Data (FRED)

Also Worth Noting

Indicator	Period	Current	Previous
Rate Cut Since Cutting Cycle Began (Sept 2025)	Sept 2025 – Feb 2026	–0.69 percentage points	4.33% (Aug 2025)
Unemployment Rate	February 2026	4.4%	Prior reading: 4.3%

Source: Federal Reserve Economic Data (FRED)

Market Reaction

Financial markets took the pause in stride. The S&P 500 was last recorded at 6,795.99, up 0.8% in recent trading, suggesting investors are not alarmed by the hold. The 10-year Treasury yield edged up slightly to 4.15%, a modest move indicating bond traders are not dramatically repricing their expectations for future Fed action. The relative calm across both stocks and bonds points to a market that had already anticipated the pause rather than one caught off guard.

Signal vs. Noise

Likely temporary (noise):

A single meeting's pause does not confirm the cutting cycle is over — the Fed frequently skips meetings before resuming a trend
Month-to-month CPI movement of +0.2% is within normal range and may not reflect a durable inflation rebound

Possible signals:

The Fed has now held rates flat for two consecutive months (January and February 2026), suggesting deliberate caution rather than an accidental skip
Rising unemployment (4.4%) alongside a rate hold creates a tension the Fed will eventually have to resolve
The cutting cycle that began in September 2025 reduced rates steadily for five months — the abrupt pause may indicate policymakers see inflation risk as not yet fully contained

Pattern to Remember

Historically when the Fed paused after a string of cuts, the next move often depended on which changed more clearly — jobs or inflation.

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Fed Holds Rates at 3.64%, Pauses After Five Straight Months of Cuts | Tyche