Fed Holds Rates Steady at 3.5%-3.75% Amid Mixed Economic Signals
The Federal Reserve maintained its benchmark interest rate at 3.5%-3.75% on January 29, 2026, marking a cautious pause as inflation remains stubbornly high and job growth weakens. Two FOMC members dissented, advocating for a 0.25% cut—a hint of diverging views within the central bank.
Economic activity expands steadily, but the labor market shows cracks. Inflation persists above target, complicating the Fed’s dual mandate of maximum employment and price stability. The MOVE index aligns with expectations, reflecting market consensus on the Fed’s data-dependent stance.
Monetary policy remains in a holding pattern. Future rate adjustments hinge on incoming data, risk assessments, and the elusive 2% inflation target. The Fed’s statement omitted explicit forward guidance, emphasizing flexibility amid uncertainty.
