What the Fed's Rate Pause Means for Savings

At the latest policy-setting meeting, the Fed kept interest rates steady. Here's what that means for savings rates.

Wooden blocks spelling FED% with a green arrow on a background of cash.
(Image credit: Getty Images)

The Federal Reserve decided to hold interest rates steady for the fifth consecutive time at its most recent policy-setting meeting in March. Since March of 2022, the central bank has been increasing interest rates in an attempt to combat high inflation, which peaked at 9.1%. And while this caused savings rates to rapidly increase, they've been dropping since the Fed began to put a pause on rate hikes.

As the Federal Reserve once again holds interest rates steady, the Federal Funds rate remains at a target range of 5.25% to 5.5%, the highest it’s been in 23 years. However, several rate cuts are slated for later this year. The Federal Reserve maintains their earlier projection that there will be three interest rate cuts in 2024 to reduce the federal funds rate to a range of 4.5% to 4.75%.

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Erin Bendig
Personal Finance Writer

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.