In January 2026, the Federal Reserve made a pivotal decision to keep interest rates steady in a range of 3.5% to 3.75%, marking a significant pause after a series of previous rate cuts amid growing economic stability.
Fed Chair Jerome Powell faced intense political pressure from former President Donald Trump, who urged for lower rates to stimulate economic growth and publicly criticized the Fed's actions.
The decision came during a Federal Open Market Committee meeting, with a decisive 10-2 vote in favor, reflecting confidence in recent improvements in the job market and overall economic health.
Despite a favorable economic outlook, concerns about elevated inflation continued to loom, prompting cautious maneuvering from the Fed as officials sought to balance competing economic forces.
As Powell navigated scrutiny over the Fed's independence, he emphasized the importance of avoiding political interference in monetary policy, underscoring the delicate balance of governance and economic stewardship.
The Fed's steady stance reverberated through global markets, significantly influencing stock performance and currency stability, showcasing the interconnectedness of the US economy with the wider world.