United States Interest Rate

The Fed left the federal funds rate unchanged at the 3.5%–3.75% target range in its January 2026 meeting, in line with expectations, after three consecutive rate cuts last year that pushed borrowing costs to their lowest level since 2022. Governors Stephen Miran and Christopher Waller however, voted against the hold, with both advocating another 25bps cut. Policymakers noted that economic activity has been expanding at a solid pace, job gains have remained low, and the unemployment rate has shown some signs of stabilization, while inflation remains somewhat elevated. The central bank also reinforced that it will carefully assess incoming data, the evolving outlook, and the balance of risks when considering the next adjustments to the fed funds rate. During the regular press conference, Chair Powell said the US economy is coming into 2026 on a firm footing and that interest rates right now are appropriate to promote progress toward both of the Fed’s goals.