FOMC Update - Jan 2026

January 28, 2026

As expected, the FOMC did not change its benchmark rate at this meeting, pausing after three cuts in 2025. Policymakers held the federal funds target range at 3.50%–3.75% and signaled a cautious stance on future cuts amid inflation remaining above target and a resilient economy.

Rates and Market:

Fed Funds Target: 3.50% - 3.75% (unchanged).
Market Reaction: Markets are now pricing a lower probability of near-term cuts, with some expectations for a cut around mid-year, though timing is uncertain.
Forecasts suggest inflation will stay above 2%, and GDP and labor market conditions remain relatively stable.

The FOMC announced the following actions and analysis:

10-2 policy vote. Governors Waller and Miran dissent in favor of a 25bp cut.
The labor market has softened modestly but remains stable.
The Fed signaled readiness to adjust policy as appropriate, but did not commit to specific cuts at upcoming meetings.

FOMC Statement
Implementation Note issued January 28, 2026

Previous Report

FOMC Update - Dec 2025 (12/10/25)

As expected, the FOMC lowered the federal funds rate target range by 25bp to 3.50%-3.75%. The Fed will begin $40B of T-Bill purchases on 12/12/2025 to maintain an ample supply of reserves. A tweak in the statement referring to...