#FedKeepsRatesUnchanged

#FedKeepsRatesUnchanged

✴️Following the January 28, 2026 FOMC meeting, Jerome Powell detailed the Fed's decision to keep interest rates unchanged and emphasized the strong performance of the economy. Speaking on behalf of the FOMC members, Fed Chairman Jerome Powell stressed independence during questioning, stating that despite pressure from the Trump administration, "the Fed maintains its independence and policy decisions will be data-driven." In his opening remarks, Powell stated that the economy is "on solid ground." He indicated that the current policy stance (3.50%-3.75%) is appropriate after the 75 basis point cuts made in the last three meetings, and that inflation is still somewhat high, but largely due to tariffs. He predicted that tariffs would have a one-off price increase effect, peaking by mid-2026 and then declining. He said they were seeing signs of stabilization in the labor market after a softening, and that policy was no longer restrictive. The decision was made with a 10-2 vote (Miran and Waller called for a 25 bp cut).
✴️ Highlights:
🔷 "Upside inflation risks and downside employment risks have decreased; however, they haven't reached full equilibrium."
🔷 "Policy is no longer significantly restrictive; many members are saying this based on data."
🔷 "The next move will be data-driven; we will decide meeting by meeting. An increase is not anyone's base scenario."
🔷 The economy is showing "solid growth"; unemployment is stable at 4.4%, consumption is resilient.
🔷 Inflation expectations have declined in the short term (reassuring), and there is confidence in a 2% rate hike in the long term. 🔷 Impacts: Markets reacted neutrally; slight selling in stocks and crypto, gold experienced short-term volatility. Expectations of a limited rate cut in 2026 (1-2 times) have strengthened; the Fed signaled its commitment to maintaining economic stability by continuing its cautious stance. Trump-era tariffs could increase the risk of inflation, but Powell remained committed to data-driven independence. Powell made a balanced start to 2026 by emphasizing that the Fed remains "bound by both mandates."