U.S. Economy and Interest Rates

Economists expect the Fed to hold the federal funds rate at 3.5%–3.75% at its Jan. 28, 2026 meeting (decision at 2 p.m. ET, Powell press conference at 2:30), pausing after three quarter‑point cuts in late 2025 as inflation remains above 2% and the labor market weakens amid internal FOMC division over further easing. Chair Jerome Powell is simultaneously facing a DOJ probe into the Fed’s headquarters renovation and a Supreme Court fight over Lisa Cook’s removal as political pressure mounts ahead of a May succession decision, but former officials say those developments are unlikely to alter the Fed’s economic deliberations and may even bolster support for Fed independence.