Fed is likely to hold interest rates steady, resisting Trump pressure.

Despite the escalating political pressure from President Donald Trump, the Federal Reserve System is expected to keep interest rates unchanged at its policy meeting this week. 

Amidst a slowdown in the labor market, inflationary pressures, and geopolitical uncertainty, futures markets, as indicated by CME Group's FedWatch metric, have priced in virtually no likelihood of interest rate cuts. 

According to Matt Schulz, chief credit analyst at LendingTree, the Fed's pause may disappoint Americans who hope to reduce their debt payments. 

"Even so, interest rates on various loans have been at their lowest levels for many years and are likely to continue falling for at least some time to come," Schultz said. "This is good news amidst the ongoing affordability issues faced by households."

If the Federal Reserve suspends as expected, Trump is likely to become the fiercest critic of the central bank's decision.

At the World Economic Forum in Davos, Switzerland, last week, the president intensified his criticism of Federal Reserve Chairman Jerome Powell and stated in a CNBC interview that he had narrowed down the list of candidates to "probably one person" to succeed Powell. He is widely expected to choose someone who is more inclined towards significant interest rate cuts.

The president said in a speech last week that inflation had been "beaten." In his previous comments on the Federal Reserve, he also stated that maintaining an excessively high federal funds rate made it more difficult for businesses and consumers to borrow, putting the United States at a disadvantage economically relative to countries with lower interest rates.

Fixed mortgage interest rates, for example, do not directly track the Federal Reserve, but usually follow the trend of long-term treasury bond interest rates.

According to Mortgage News Daily, as of Friday, the average interest rate for 30-year fixed-rate mortgages stood at 6.19%, marking a rise of over 7% compared to the previous year — a development partly attributed to Trump's initiative to encourage Fannie Mae and Freddie Mac to purchase $200 billion worth of mortgage bonds.

After Mr Trump announced the plan, the average interest rate on 30-year fixed-rate mortgages briefly fell below 6 per cent earlier this month.

“Mortgage rates did dip below 6 percent in recent weeks for the first time in years, but they spiked again last week due to geopolitical turmoil surrounding Greenland,” said Melissa Cohen, a regional vice president at William R. Raver Mortgage. If tensions ease, rates could drop again, she said, but “rates are going up much faster than they are going down.”