Summary:  As inflation and interest rates continue to shift, even small changes can have a big impact on everyday finances. 

As households plan for 2026, two economic signals should demand your attention: inflation and interest rates. Most forecasts call for only moderate changes in these vital measures of economic health, but the direction and size of the fluctuations depends on who you ask — and even the most modest change can affect borrowing, saving and long-term financial planning.

Inflation: Cooling, but not settled

Most economists expect inflation to ease slightly in 2026, though estimates vary. On inflation, the Federal Reserve projects a 2.6% increase in 2026, down moderately from a 3.0% increase in 2025. Analysts at the professional services firm Deloitte, however, are looking for more inflation, forecasting increases of 3.3% for the year, citing higher tariffs. Ernst & Young, another top consulting firm, splits the difference, expecting inflation to peak at 3.2% early in the year.

Interest rates and economic growth

When it comes to interest rates, Federal Reserve forecasters envision setting the key federal funds rate at 3.4% by the end of 2026. That’s down slightly from 3.6% in 2025. Deloitte expects the Fed will cut rates further, to 3.125%, while Ernst & Young suggests rates may fall even lower, at least temporarily.

Meanwhile, economic growth is expected to remain steady but modest, with GDP growth projects ranging from 1.4% to 1.9%

How this could affect your finances

National economic trends like these can directly affect individuals by impacting the cost of borrowing as well as the return they can get on their savings.

• Auto loans: Rates often track the federal fund rate. which were pegged at an average of about 7% for new-car purchases in mid-2025. 
  • Credit Union Tip: Credit Union members can apply for auto loans as low as 3.99%* for up to 36 months. But remember, while dealer financing may provide attractive rates, they’re often limited to restricted inventory selections, high add-on charges and other fees.
    
    
• Mortgages: After starting 2025 averaging nearly 7%, mortgage rates dropped to 6.25% on average in the fourth quarter. In 2026, rates are expected to remain steady. 
  • Credit Union Tip: We offer competitive rates as low as 5.875% *on 30-year fixed loans.
    
    
• Credit cards: Credit card rates, like auto loans, may respond to changes in the benchmark rate. They aren’t likely to closely track it, however, so the cost of carrying a monthly balance is likely be about the same in 2016.
  • Credit Union Tip: Check out the Credit Union’s low-rate cards and explore balance transfers from other credit cards carrying higher rates.
    
    
• Savings: As borrowing costs have declined along with interest rates during 2025, so have yields on savings deposited in interest-bearing account. This trend continues in 2026, with rates paid on savings accounts and certificates of deposit likely to decline more or less in tandem with changes to the Fed benchmark rate. Currently, the Credit Union offers up to 1.87% annual percentage yield on savings accounts and 4.05% on short-term share certificates.* 
  • Credit Union Tip: Visit with a financial advisor to consider locking in attractive share certificate ladder rates as part of a long-term financial plan.

Focus on what you can control

While inflation and interest rates are outside individual control, personal financial habits are not. Paying bills on time, managing debt responsibly and maintaining strong credit can help members secure better rates and stay financially resilient, regardless of economic conditions.

*Rates accurate as of 02/20/2026