Fed Holds Rates Steady, Two Governors Dissent

The Fed kept rates unchanged at 3.5% to 3.75% in January, as expected, following three cuts last year. Two governors (Miran and Waller) voted for another quarter point cut, but the majority held firm. Powell characterized the economy as entering 2026 on solid footing, with the current rate level well positioned to support both employment and inflation goals. The Fed signaled it will remain data dependent on future moves, noting inflation is still somewhat elevated despite a stabilizing job market.