The US Federal Reserve Holds Interest Rates Steady and Maintains Monetary Policy
At Powell's press conference today, the Federal Reserve kept its benchmark interest rate unchanged at 3.50%–3.75% at its first monetary policy meeting of 2026, with strong statements from Chairman Jerome Powell regarding the future direction of monetary policy.
Fed's Decision: Interest Rates Held Unchanged
The US Federal Reserve announced today, Wednesday, that it would hold the federal funds rate steady at 3.50%–3.75% at its first monetary policy meeting of 2026, in line with global market expectations.
The decision was supported by a majority of committee members (10 votes) with two dissenting votes, which favored a further rate cut.
This decision ended a three-week streak of interest rate cuts scheduled for 2025.
Jerome Powell's remarks at the press conference
During the press conference following the announcement of the decision, Jerome Powell stated that:
1. Monetary policy is appropriate at present
Powell affirmed that the current monetary policy is appropriate and that the committee does not see an immediate need to change the interest rate level, noting that economic data will determine future steps.
2. Inflation remains high
He indicated that the inflation rate remains above the central bank's target, requiring caution in future monetary policy actions.
3. The labor market is relatively strong
With the labor market becoming stronger and employment indicators remaining relatively stable, Powell pointed out that the Fed is closely monitoring employment data before making any new changes.
4. The Fed's independence is important
In an indirect reference to the political and legal pressures recently faced by the institution and its chairman, Powell emphasized the independence of monetary policy and that the Fed's decisions will not be influenced by external or political pressures.
Market Reactions and Expectations
Markets had already priced in the expectation of a rate hold before the announcement, so there were no sharp swings at the time.
Traders are now focusing on Powell's tone during the press conference and whether he hinted at future steps (such as a rate cut or holding the rate steady at upcoming meetings).
