U.S. Federal Reserve Chairman Jerome Powell speaks during a press conference after two days of Federal Open Market Committee (FOMC) meetings on interest rate policy in Washington, DC, USA, January 28, 2026.
Jonathan Ernst | Reuters
The Federal Reserve concluded its two-day policy meeting on Wednesday with results largely in line with market expectations, with no major surprises from Chairman Jerome Powell’s press conference. Here are five things worth remembering.
The decision: To no one’s surprise, the Federal Open Market Committee, which sets interest rates, has kept benchmark fund rates unchanged at a range of 3.5% to 3.75%. The move breaks three consecutive rate cuts and could be a sign that the central bank has no intention of easing again anytime soon. Now, Gov. Stephen Millan and Gov. Christopher Waller have called for an additional quarter-point cut. But for Milan, this represented a bit of a turnaround, as it departed from his previous three dissenting opinions in favor of a half-point reduction. Mr. Powell’s post-meeting press conference was, to put it simply, a snooze. In response to questions from reporters trying to get him to comment on the multiple political turmoil surrounding the Fed, the chairman said in five different variations, “I don’t have anything to say about that.” Asked what advice he would give to his successor, Powell said: “Stay out of elected politics.” From an economic perspective, the FOMC statement and Mr. Powell’s comments reflect expectations that the labor market is stagnant, with strong growth, a short-term boost to inflation from tariffs that will eventually roll back, and declining labor force participation and immigration that are holding down hiring while also containing layoffs. And the market yawned. With nothing to do, the major stock averages closed little changed. Traders are still pricing in a roughly 60% chance of two more quarter-point rate cuts this year.
what they are saying
“The Fed has cut rates, but it has been a bit more hawkish. The Fed hasn’t closed the door on further rate cuts, but Powell has raised the bar for further action. We expect the economy to grow at a solid pace next year, but that must be accompanied by job growth. The next jobs report may show just the opposite.” — Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management.
“For now, the Fed is accommodating, but there will be major changes in May when a new Fed chair takes over.” — Heather Long, chief economist at Navy Federal Credit Union.
“Prospectively, we see this meeting as confirmation from the Fed of what investors already thought: working conditions are not deteriorating, growth is accelerating, and inflation is stable for now. In other words, policy rates are much closer to neutral against the current backdrop, and a long hiatus has arrived.” — Charlie Ripley, senior investment strategist at Allianz Investment Management.
