Wed, 28 Jan 2026

Wed, 28 Jan 2026 US Fed holds interest rates and defends independence

Two Fed officials voted for a cut, including the former head of Donald Trump's Council of Economic Advisers.
The Federal Reserve has decided to keep interest rates between 3.5% and 3.75%, with Fed Chair Jerome Powell citing a "solid pace" in US economic activity. Powell emphasized the importance of central bank independence, saying it would be difficult to restore credibility if institutions lost autonomy. Despite concerns about the employment market, the Fed believes inflation remains above target, leading to no rate cut for now. Two Fed officials voted in favor of an interest rate cut, but the majority held rates steady due to recent economic data showing strength. The decision was seen as a victory for Powell, who has been under pressure from President Donald Trump to cut rates more quickly. Trump's plans to replace Powell with a new chair could raise further questions about the Fed's independence and credibility. Economists remain divided on the implications of the decision, but most agree that lower interest rates may be coming in the future.
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