The Latest Personal Finance News for February 2026

New Inflation Numbers Boost Support for Another Interest Rate Cut

The U.S. Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose 2.4% year-over-year in January 2026. That's down from 2.7% in December and slightly below what economists had expected. The 2.4% clip marks the slowest pace of inflation since May 2025.

Core CPI, which strips out volatile food and energy prices, rose 2.5% annually, the lowest reading since April 2021. On a monthly basis, prices climbed just 0.2%—the smallest monthly gain since July. The Federal Reserve, which already cut interest rates three times in late 2025, held its benchmark rate steady at 3.5% to 3.75% in January. However, the cooler-than-expected inflation data has renewed market speculation that the Fed could resume cutting rates as early as June 2026.

Why It Matters

The Fed's benchmark rate has a direct influence on what banks charge consumers for borrowing. When the Fed cuts rates, interest rates on credit cards, auto loans, personal loans and home equity lines of credit often follow.

For Americans carrying variable-rate debt or planning a major purchase, a rate cut could mean meaningful savings. That said, analysts expect the Fed to hold steady through at least the spring while officials weigh ongoing economic uncertainty, labor market conditions and whether inflation continues moving toward the central bank's 2% target.

Consumers shouldn't count on relief before summer, but the January inflation report is an encouraging sign that the path toward lower rates is still open.

What You Can Do

• Learn about the federal funds rate.
• Understand how the Fed rate cuts impact your finances.
• Find out how Fed rate cuts affect credit cards.
• Look for ways to reduce your risks when borrowing money.

Mortgage Rates Drop Below 6%

The average rate on a 30-year fixed mortgage fell to 5.99% on February 23—its lowest level since September 2022—according to Mortgage News Daily. That's down nearly a full percentage point from 6.87% a year ago.

Freddie Mac's weekly survey, released February 19, corroborated the trend, putting the average at 6.01%. The decline is being driven by a combination of factors, including broader bond market improvement, ongoing tariff uncertainty and economic weakness reflected in a recent gross domestic product (GDP) report.

Rates have eased gradually over several weeks, which Mortgage News Daily analyst Matthew Graham said makes the current level more sustainable than a brief dip below 6% in January that reversed the same day.

Why It Matters

For homebuyers and homeowners alike, the drop below 6% is meaningful. Even before rates crossed that threshold, refinance applications were already surging—up 132% year over year for the week ending February 13, according to the MBA's Weekly Mortgage Applications Survey.

Purchase applications have been slower to respond, running just 8% higher year over year for the same period, reflecting the fact that elevated home prices and tight inventory continue to weigh on affordability even as borrowing costs fall.

Still, the timing is significant heading into the spring homebuying season. Where rates go from here will depend largely on incoming inflation and labor market data.

What You Can Do

• Stay on top of the current mortgage rates.
• Read up on mortgage rate forecasts for 2026.
• Learn about how mortgage interest works.
• Consider whether now is the right time to buy a house.

Government Shutdown Took a Bite Out of GDP Growth

The U.S. economy grew at an annualized rate of just 1.4% in the fourth quarter of 2025, according to an advance estimate released by the Bureau of Economic Analysis (BEA). That's well below the 2.5% economists had projected, and also marks a sharp deceleration from the 4.4% growth rate recorded in the third quarter.

For the full year, GDP grew 2.2%, down from 2.8% in 2024 and the slowest pace since 2020. The primary drag was a steep decline in federal government spending, which fell at an annualized rate of 16.6% during the quarter—a direct result of the 43-day government shutdown that ran from October 1 through November 12.

The BEA estimated the shutdown subtracted approximately 1 percentage point from fourth-quarter growth.

Why It Matters

The GDP miss looks worse than it actually is. The government shutdown lasted nearly half of the fourth quarter, and economists largely view the slowdown as a one-time blip rather than a sign of deeper trouble—without the shutdown's drag, growth would have been closer to 2.4%, a perfectly normal pace.

That said, the savings rate dropped to 3.6% in December—its lowest level since October 2022—suggesting some households were already feeling financially stretched heading into the new year. But with the shutdown now in the rearview mirror, most economists expect a meaningful rebound in early 2026.

What You Can Do

• Contact your student loan servicer to confirm your loan status.
• Learn more about the federal collections process.
• Research options for when you can't pay your student loans.
• Review your options for getting out of student loan default.

Good Credit Can Contribute to a Healthy Financial Plan

While there are aspects of your financial situation that are outside of your control, building and maintaining a good credit score can help you weather challenges and save money in the long run.

With Experian's free credit monitoring service, you'll get access to your FICO^® Score^Θ and your Experian credit report. With this information in hand, you can gauge your credit health and target areas of your credit profile that you can improve over time. And with real-time alerts whenever your report is updated, you can spot potential issues and fraud and address them quickly.