Federal Reserve May Keep Rates Unchanged for Months

Central bank officials expected to hold off on further rate cuts despite pressure from White House

Jan. 28, 2026 at 12:39pm

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Federal Reserve officials are expected to keep their short-term interest rate unchanged on Wednesday, ignoring pressure from the White House for lower borrowing costs. The central bank cut rates three times last year to shore up the economy, but there are signs the job market has stabilized and the economy could be picking up, even as inflation remains above the Fed's 2% target.

Why it matters

The Fed's decision on interest rates has significant implications for consumers, businesses, and the broader economy. Keeping rates unchanged could signal the central bank's confidence in the economy's resilience, but it also risks drawing further criticism from the Trump administration, which has aggressively pushed for lower rates.

The details

The rate-setting committee remains split, with some officials opposed to further cuts until inflation comes down and others who want to lower rates to further support hiring. The Fed has faced unprecedented pressure from the White House, including subpoenas from the Justice Department and a Supreme Court case over the firing of a Fed governor. However, the turmoil may have backfired, with Republicans in the Senate voicing support for Fed Chair Jerome Powell and threatening to block Trump's replacement.

  • The Fed is expected to announce its decision on Wednesday, January 29, 2026.
  • In December, just 12 of the 19 participants in the committee's meetings supported at least one more rate cut this year.
  • Most economists forecast the Fed will cut rates twice this year, most likely at the June meeting or later.

The players

Jerome Powell

Chair of the Federal Reserve.

Lisa Cook

Federal Reserve governor, facing allegations of mortgage fraud that she denies.

Beth Hammack

President of the Cleveland Federal Reserve.

Neel Kashkari

President of the Minneapolis Federal Reserve.

Lorie Logan

President of the Dallas Federal Reserve.

Anna Paulson

President of the Philadelphia Federal Reserve.

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What they’re saying

“I see inflation moderating, the labor market stabilizing and growth coming in around 2% this year. If all of that happens, then some modest further adjustments' to the Fed's key rate 'would likely be appropriate later in the year.”

— Anna Paulson, President of the Philadelphia Federal Reserve (woub.org)

What’s next

The Fed's decision on interest rates will be closely watched by investors, consumers, and policymakers. If the central bank holds off on further rate cuts, it could face continued pressure from the White House, but it may also signal confidence in the economy's resilience.

The takeaway

The Federal Reserve's decision to keep interest rates unchanged, despite pressure from the White House, highlights the central bank's efforts to balance economic stability with its mandate for price stability. The ongoing tensions between the Fed and the administration underscore the delicate balance of power and independence that the central bank must navigate.