The Federal Reserve held its benchmark interest rate steady on Wednesday, formalizing a data-dependent approach to balancing the U.S. labor market against inflationary risks, amid ongoing White House pressure to accelerate monetary easing.
The decision, which was widely expected, kept the federal funds rate at a target range of 3.50% to 3.75%. The move followed three consecutive 25-basis-point cuts late last year that had sought to engineer a “soft landing” for the economy.
During its latest policy meeting, two members of the Federal Open Markets Committee broke away from the group’s decision. Stephen Miran, whose term expires this month, advocated for a 25-basis-point cut, as well as Christopher Waller. Both are Trump appointees.
In December, a 9-3 vote among FOMC members had the most dissents since 2019, with divisions emerging over the labor market’s resiliency and inflation’s persistence.
With U.S. President Donald Trump expected to soon name a replacement for Fed Chair Jerome Powell, whose term expires in May, the conclusion of the central bank’s first gathering in 2026 underscored a wait-and-see approach toward changes to borrowing costs.
The Fed has pointed to changes to immigration and trade policy as factors clouding its ability to get a firm grip on the direction of the economy. At the same time, data disruptions stemming from a government shutdown last year effectively erased key data points.
