The Federal Reserve has made it clear that it’s maintaining its stance on interest rates. In their minutes from the January 28-29 meeting, the Fed confirmed that it would not be reducing rates just yet, keeping the federal funds rate in the 4.25% to 4.50% range. The primary reason for this decision is persistent inflation. While the Fed’s dual mandate of achieving maximum employment and keeping inflation at around 2% is its guiding principle, inflation continues to be a major obstacle.$XRP $BTC #

Despite strong labor markets and low unemployment, Fed officials are emphasizing the need to be cautious. They know that lowering rates prematurely could lead to a resurgence of inflation. According to the minutes, the risks related to meeting both employment and inflation targets are considered balanced, but that balance is contingent on incoming data. Economic indicators such as inflation trends, labor market statistics, and shifts in financial conditions will heavily influence the Fed’s next steps.

Moreover, the Fed plans to continue reducing its holdings in Treasury securities and mortgage-backed debt to control liquidity. This approach aligns with their overall goal of keeping inflation in check while avoiding an overheating economy. The global economic situation remains uncertain, with ongoing supply chain disruptions and unpredictable financial markets, but the Fed believes it has prepared adequately for potential shocks. While flexibility remains, January 29th wasn’t the moment for a policy change.

This decision also comes amid political pressure, particularly from former President Donald $TRUMP , who had stated his intentions to push the Fed into cutting rates. With Federal Reserve Chair Jerome Powell set to speak soon, all eyes are on whether he will address the growing tensions with the White House. Powell has previously affirmed the Fed's independence and made it clear that any attempt to interfere with its operations would be met with legal challenges.

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