The #Federal Reserve is expected to hold the federal funds rate steady at 3.5%–3.75% during its January 2026 meeting, signaling a pause after three back-to-back cuts last year that brought borrowing costs to their lowest levels since 2022. Market participants will be closely watching any guidance on the timing of the next rate reduction, though policymakers may indicate an extended hold.
Recent data show a marked slowdown in job growth, a stable unemployment rate, and inflation lingering above the Fed’s 2% target, all of which support a cautious approach. In its December projections, the Fed signaled only a single 25-basis-point cut for 2026, with markets largely anticipating it around June and a smaller chance of another adjustment by December.
Chair Jerome Powell’s upcoming press conference, the first since the Fed received grand jury subpoenas, is expected to draw questions on political pressures and the bank’s independence, adding a layer of scrutiny to an already closely watched policy meeting.
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