US Fed Meeting 2026 highlights: Central bank holds rates at 3.5%–3.75%- Powell points to tariff pressures

Go to Live Updates US Fed FOMC Meeting highlights: The Federal Reserve kept interest rates unchanged at 3.5%–3.75% in its first meeting of the year, a move that was widely expected. However, the decision was not unanimous. Two officials on the Federal Open Market Committee, Federal Reserve governors Stephen Miran and Chris Waller voted in favour of cutting rates by 25 basis points. The Fed said it will decide policy meeting by meeting in 2026, after cutting interest rates in its previous three meetings. Recent Fed discussions have been marked by disagreements over how inflation is behaving and how strong the labor market is. At the December meeting, some officials even opposed the Fed’s 0.25% rate cut, with views split on both sides. In December, Fed officials also forecast only one interest rate cut in 2026, showing a cautious approach to easing policy. Fed Chair Jerome Powell is scheduled to hold a news conference at 2:30 p.m. EST on Wednesday, Jan. 28, shortly after the policy decision is released. After the Fed’s December meeting, Powell said policymakers were “well positioned to wait to see how the economy evolves” before making any further moves. When the Fed lowers its short-term rate, it can eventually affect borrowing costs for mortgages, auto loans, and business loans, although those rates are also influenced by market forces. Legal scrutiny looms over the meeting Today’s meeting is taking place under unusual circumstances. Earlier this month, it was revealed that the Justice Department subpoenaed the Fed as part of a criminal investigation into testimony Powell gave last June about a $2.5 billion building renovation. It is the first time a sitting Fed chair has faced such an investigation, and it prompted an unusually public response from Powell. Powell is expected to shift attention back to the Fed’s economic role and emphasise that interest rate decisions are not influenced by politics. On Jan. 11, Powell said the subpoenas were “pretexts” meant to punish the Fed for not cutting rates as aggressively as Trump wants. Powell will be “under even more pressure to underscore, ‘everything we’re doing here … is all about the economics,’” said Claudia Sahm, a former Fed economist and chief economist at New Century Advisors to AP. “‘We didn’t think about the politics.’” Michael Gapen, chief U.S. economist at Morgan Stanley and a former Fed staffer, said the scrutiny is unlikely to change how the Fed operates. “The meetings have a regular flow to them,” he said. “There are presentations that are made, there are discussions that have to be had. … Some of these other broader-based attacks on the Fed don’t really come up.” Strong growth reduces urgency for rate cuts Other Fed officials have also signaled that rates are likely to remain unchanged at the two-day meeting that ends Wednesday. The Fed’s three rate cuts last year were aimed at supporting the economy after hiring slowed sharply during the summer and fall, following Trump’s April tariffs on dozens of countries. Economic growth has remained strong. The economy expanded at a 4.4% annual rate in the July–September quarter and may have grown at a similar pace in the final months of last year. If that strength continues and hiring improves, Fed officials are likely to see little need for additional rate cuts in the near term. Live Updates US Fed FOMC Meeting Live Updates: Check Live Coverage on US Fed Rate Cut, Interest Rate Cut, Policy Decision Today 12:13 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Rupee slides to a new record low The Indian rupee hit a fresh all-time low on Thursday, slipping under pressure from continued foreign fund outflows and rising demand from companies and investors trying to protect themselves against further fall in the currency. The rupee weakened to ₹91.9850 against the US dollar, crossing its earlier record low of ₹91.9650, which was touched just last week. The fall came despite strong economic data from India. So far in 2026, the rupee has fallen nearly 2%, and it is now down almost 5% since US President Donald Trump announced steep tariffs on Indian merchandise exports. This decline comes even as India’s economy showed strong momentum. Official data shows India’s GDP grew 8.2% in the quarter ending September 30. 11:16 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Markets react sharply The US Federal Reserve has decided to keep interest rates unchanged, and the move has already triggered strong reactions across global markets. While the decision itself was widely expected, experts say what followed tells a bigger story about investor confidence and shifting risk appetite. Bond yields moved quickly, gold prices jumped, and questions around trust in financial assets came into sharper focus. Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities, said the immediate market reaction was visible in both bonds and commodities. After the Fed’s decision, US 10-year bond yields briefly surged to 4.897 per cent before easing. But Sheth said the real signal came from precious metals, especially gold. “The rally, especially in gold, indicates growing concerns around the Fed’s independence and counterparty risk,” Sheth said. He explained that investors appear to be moving away from traditional financial assets and leaning more towards hard assets such as gold and commodities. 09:55 (IST) 29 Jan 2026 Key Highlights – US Fed Update Policy Decision The FOMC voted by a 10:2 majority to keep the federal funds rate unchanged at 3.50%–3.75%. The Committee views the current policy stance as appropriate to balance growth and inflation objectives. Inflation & Expectations US inflation remains above the 2% target, driven by higher goods prices due to tariffs. Disinflation in services continues, and long-term inflation expectations remain anchored around 2.0%. Labour Market & Growth Labour market conditions are showing signs of stabilisation, though payroll growth remains weak. Unemployment has seen a marginal decline recently, but softer labour demand persists. Economic growth remains resilient, supported by consumption and business investment, while the housing sector shows signs of stress. Market Impact & Outlook Equity indices and bond yields closed flat post the decision, while the dollar remained under pressure. As per the Fed’s projections, only a 25 bps rate cut is expected in 2026, subject to incoming data. 09:38 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Fed in 'wait and watch' mode Sharing her views in the latest edition of Cues in the News, Ankita Pathak, Head – Global Investments at Ionic Asset, said the Fed is clearly in a wait-and-watch mode. According to Ionic Asset, the current policy stance reflects the uncertainty around inflation, growth, and jobs. While hiring remains slow, there are early signs that the labour market is beginning to stabilise. At the same time, the US economy continues to show strength. Consumer spending remains solid, and businesses are still investing. That said, the housing sector is under stress and continues to face pressure from higher borrowing costs. A more dovish shift by the Fed in the coming months could make emerging markets more attractive compared to the US. Inflation remains above the Fed’s 2% target, mainly due to higher prices of goods caused by tariffs. However, inflation in services is gradually cooling. Importantly, long-term inflation expectations remain anchored around 2%, which gives the Fed some comfort that price pressures are not spiralling out of control. 08:04 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Markets react calmly to Fed decision US stock markets ended the day on a positive note after the Fed’s announcement. Investors appeared reassured by the central bank’s decision to pause and assess how the economy is responding to earlier rate cuts. In India, equity markets also showed strength. The NIFTY 50 closed at 25,175.4, up 126.75 points, while NIFTY Bank gained 350.7 points to end at 59,556.15. Midcap and smallcap stocks outperformed, with the NIFTY Midcap 100 rising 1.66% and the NIFTY Smallcap 100 jumping 2.26%. Market volatility eased as well. The India VIX dropped nearly 7%, reflecting calmer investor sentiment. 07:21 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Budget deficits and central bank independence Powell also flagged US deficits, calling the federal budget deficit “uncontroversially on an unsustainable path.” “The sooner we work on it, the better,” he said. He defended the Fed’s independence from elected officials, warning that public trust is crucial. “If you lose that, it’s going to be hard to retain it. I’m strongly committed to that, and so are my colleagues.” 06:57 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: No preset course for rates Powell said the Fed is not setting a timetable for the next move. “Monetary policy is not on a preset course,” he said, adding the Fed will decide on a meeting-by-meeting basis. He noted that the Fed could ease again if inflation cools and the job market weakens. “A weakening labour market would be an argument for loosening,” he said, while also monitoring inflation closely. On potential rate hikes, Powell said: “We don’t take things off the table. It isn’t anybody’s base case right now … that the next move will be a rate hike.” 06:22 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: US Federal Reserve holds rates, Powell points to tariff pressures- Takeaways The US Federal Reserve decided to keep interest rates steady, with Chair Jerome Powell highlighting that inflation is still “somewhat elevated,” partly due to tariffs pushing up goods prices. The Federal Open Market Committee opted to leave the federal funds rate unchanged at 3.5% to 3.75%, Powell told reporters on Wednesday. Powell said the economy “expanded at a solid pace last year” and is entering 2026 “on a firm footing.” Consumer spending remains “resilient,” and business investment continues to grow. However, he noted that housing “has remained weak.” He also mentioned the recent federal government shutdown, saying it “likely weighed on economic activity last quarter,” but expected the effects to reverse as the government reopened and boosted growth this quarter. On employment, Powell said conditions “may be stabilising after a period of gradual softening.” The unemployment rate in December was 4.4%, largely unchanged over recent months. Still, job growth has been weak. “Total nonfarm payrolls declined at an average pace of 22,000 per month over the last three months,” he said. Excluding government jobs, private payrolls rose by an average of 29,000 per month. Powell attributed slower growth partly to labour supply issues. “A good part of the slowing … reflects a decline in the growth of the labour force due to lower immigration and labour force participation,” he said. “Labour demand has clearly softened as well.” Powell said inflation has cooled from 2022 but is still above the Fed’s goal. Total PCE prices rose 2.9% in the 12 months ending December, while core PCE rose 3.0%. “These elevated readings largely reflect inflation in the goods sector, which has been boosted by the effects of tariffs,” Powell said. He added that services are showing more progress: “Disinflation appears to be continuing in the services sector.” Asked if tariff effects have already moved through the economy, Powell said: “A lot of it has… Tariffs are likely to move through and be a one-time price increase.” He expects the impact of tariffs to peak and then fade, assuming no new major tariff increases. 01:45 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell says curbing inflation is key to easing affordability squeeze Powell said the central bank has heard “a lot of feedback” about an affordability squeeze facing Americans and believes bringing inflation down is the best way to help households feeling the pressure. He noted, however, that gloomy consumer sentiment surveys do not fully align with spending data. While spending has been uneven across income groups, it has remained solid overall, he said. “Consumers are looking to economize. They’re trading down from brands, buying less, and changing their buying habits,” Powell told a press conference. “They’re still consuming, but … we do hear a lot about affordability. And we take that very seriously,” he added. “The best thing we can do for people who are feeling that squeeze is to keep inflation under control and, frankly, to finish the job of getting inflation back down to 2%.” 01:42 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell warns political control would undermine Fed credibility Federal Reserve Chair Jerome Powell warned that losing the Fed’s independence from political influence would damage the institution’s credibility and ultimately hurt the public. Asked what it would mean for American households if the central bank were no longer independent, Powell said the goal of independence “is not to protect policymakers or anything like that,” but to follow a model embraced by “every advanced economy, democracy in the world," keeping elected officials from directly setting monetary policy. Powell cautioned that once independence is lost, it would be difficult to regain trust. “It would be hard to restore the credibility of the institution,” he said, adding that central bank independence has allowed policymakers, while imperfect, “to serve the public well.” When pressed on whether he believes the Fed can maintain that independence, Powell was unequivocal. “Yes,” he said. “I’m strongly committed to that. And so are my colleagues.” 01:35 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell warns US Deficit trajectory is unsustainable Federal Reserve Chair Jerome Powell said the United States is on an unsustainable fiscal trajectory, even though the current level of federal debt itself remains manageable. “The U.S. federal budget deficit is, you know, uncontroversially on an unsustainable path. The level of debt is not unsustainable. It's very much sustainable. But the path is unsustainable,” Powell said. He stressed the importance of acting sooner rather than later, noting that the government is running unusually large deficits despite strong economic conditions. “The sooner we work on it, the better. But, you know, right now, we're running a very large deficit at essentially full employment,” Powell said. Powell added that fiscal policy is not being meaningfully addressed at the moment and warned it will eventually need attention. “So the fiscal picture needs to be addressed and it's not really being addressed. So, that's important,” he said. At the same time, he cautioned against reading his comments as a warning of immediate financial stress. “I'm not in any way connecting it to some sort of near-term market event, but, ultimately it's something we'll have to deal with,” Powell said. 01:28 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell declines comment on subpoenas Powell was asked whether the Federal Reserve had responded to subpoenas from the Justice Department, but said he had “nothing for you” on the matter. The Fed has received grand jury subpoenas as part of a criminal investigation by federal prosecutors into Jerome Powell related to his congressional testimony last summer. Powell also said he had nothing further to add to the unusual video statement he released on January 11, in which he warned of political threats to the central bank’s independence. “I’m simply going to refer you to the statement that I made on January 11th. I’m not going to expand on it or repeat it,” Powell told the press conference 01:26 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell dodges question on staying on Fed board after chair term ends While Powell’s term as Fed chair ends in May, his separate term as a member of the Fed’s Board of Governors runs for another two years. Asked whether he has decided if he will remain on the board, Powell said: “No ... I really, once again, have nothing for you on that today.” 01:24 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell says tariffs driving goods price spike, not demand Powell said most of the increase in goods prices is being driven by tariffs, which he described as preferable to demand-led inflation. “Most of the overrun in goods prices is from tariffs. And that's actually good, because if it weren't from tariffs, it might mean it's from demand, and you know, that's a harder problem to solve,” he said. He added that tariffs are likely to result in a one-time price increase. “We do think tariffs are likely to move through and be a one-time price, so most of the overshoot, if if you were to take that out, you'd get and you would, I mean inflation, core PCE, inflation is running just a bit above 2% x the effects of tariffs on goods,” Powell said. 01:22 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell calls Supreme Court case over Trump bid to fire Fed governor “most important” in Fed history Powell addressed questions about his appearance at the Supreme Court hearing concerning Trump’s bid to fire Fed Governor Lisa Cook. Explaining his decision to attend, Powell said: “I would say that that case is perhaps the most important legal case in the Fed’s 113-year history.” He added that skipping the hearing could have been difficult to justify. “As I thought about it, I thought, it ... might be hard to explain why I didn’t attend. In addition, Paul Volcker went to a Supreme Court case famously in, I guess, in 1985 or so. So it’s precedented and, I thought it was an appropriate thing, and I did." 01:12 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell reiterates goal of Fed "We remain committed to supporting maximum employment, bringing inflation sustainably to our 2% goal and keeping longer term inflation expectations well anchored,” Powell said. 01:11 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell dodges question on investigation There were questions from journalists on investigation against him but he chose to not speak about the same. 01:10 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell on slow pace of job growth “A good part of the slowing in the pace of job growth over the past year reflects a decline in the growth of the labour force due to lower immigration and labour force participation, though labour demand has clearly softened, as well as other indicators, including openings, layoffs, hiring and nominal wage growth show little change in recent months,” Powell said. 01:09 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell on US government shutdown “The temporary shutdown of the federal government likely weighed on economic activity last quarter,” Powell explained impact of government shutdown 01:08 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell on US economy “Available indicators suggest that economic activity has been expanding at a solid pace. Consumer spending has been resilient, and business fixed investment has continued to expand. In contrast, activity in the housing sector has remained weak,” Powell said. 01:08 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell signals steady economic expansion despite sluggish housing sector “Available indicators suggest that economic activity has been expanding at a solid pace. Consumer spending has been resilient, and business fixed investment has continued to expand. In contrast, activity in the housing sector has remained weak,” Powell said. 01:02 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Powell to address media shortly Federal Reserve Chair Jerome Powell’s address will begin shortly. The press conference will be live-streamed on the U.S. Federal Reserve’s website at https://www.federalreserve.gov/. It will also be broadcast live on the Federal Reserve’s official YouTube channel on Wednesday at https://www.youtube.com/federalreserve. 01:00 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Who voted for steady rates? Jerome Powell, John Williams, Michael Barr, Michelle Bowman, Lisa Cook, Beth Hammack, Philip Jefferson, Neel Kashkari, Lorie Logan and Anna Paulson all supported keeping interest rates unchanged. 00:47 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: FOMC on inflation “Available indicators suggest 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. Inflation remains somewhat elevated,” FOMC stated in the press release 00:43 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Federal Reserve announced steps to carry out its monetary policy decision The Federal Reserve announced several steps to carry out its monetary policy decision made on January 28, 2026 - The Federal Reserve Board of Governors voted unanimously to keep the interest rate paid on reserve balances at 3.65%, effective January 29, 2026 - The Federal Open Market Committee (FOMC) instructed the New York Fed’s trading desk to continue managing markets to keep the federal funds rate within the target range of 3.5% to 3.75%. - The Fed will continue its overnight repurchase (repo) operations at a rate of 3.75% and overnight reverse repo operations at 3.5%, with a daily limit of $160 billion per counterparty. - To ensure there is enough money in the banking system, the Fed will buy Treasury bills and, if needed, other short-term Treasury securities with maturities of up to three years. - The Fed will also roll over all principal payments from its existing Treasury holdings and reinvest proceeds from agency securities into Treasury bills. These actions are meant to keep interest rates stable and ensure smooth functioning of financial markets. 00:40 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Who voted in favour of cutting rates? Two officials on the Federal Open Market Committee, Federal Reserve governors Stephen Miran and Chris Waller, voted in favour of cutting rates by 25 basis points. 00:38 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Federal Reserves keep interest rates unchanged The Federal Reserve kept interest rates unchanged at 3.5%–3.75% in its first meeting of the year, a move that was widely expected. However, the decision was not unanimous. 00:27 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Fed press conferences strongly move markets, study finds “Monetary policy news from press conferences—whether in isolation or in conjunction with the news in the associated statement—is a particularly important source of information, with strong effects on Treasury yields and prices of risk assets,” researchers at the bank led by Miguel Acosta, a professor of economics at the University of Wisconsin, Madison, wrote in the paper, published last month. 00:05 (IST) 29 Jan 2026 US Fed FOMC Meeting Live Updates: Fed still seen easing rates despite near-term caution Powell is expected to strike a cautious tone on near-term rate cuts but reiterate that most Fed officials still anticipate easing later this year, said Oscar Munoz, chief U.S. macro strategist at TD Securities, adding that further rate cuts remain the most likely path. 23:52 (IST) 28 Jan 2026 US Fed FOMC Meeting Live Updates: Powell likely to avoid questions on Fed independence “Powell will be peppered with questions about Fed independence, but he will likely duck most of them,” wrote Andrew Grantham, an economist at CIBC, wrote in a commentary.

US Fed Meeting 2026 highlights: Central bank holds rates at 3.5%–3.75%- Powell points to tariff pressures

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