Daijiworld Media Network - Washington
Washington, Jan 29: The US Federal Reserve on Wednesday kept interest rates unchanged, signalling that rate cuts may remain on hold for an extended period as the central bank seeks to safeguard its independence from political pressure.
The Fed maintained its benchmark lending rate in the range of 3.5% to 3.75%, following three consecutive rate cuts late last year. Chair Jerome Powell, speaking at a post-meeting press conference, suggested there is no urgency to lower borrowing costs further at this stage.
“I think, and many of my colleagues think, it is hard to look at the incoming data and say that policy is significantly restrictive at this time,” Powell said, indicating that the economy appears resilient enough to withstand the current rate levels.
The decision, however, was not unanimous. Fed governors Stephen Miran and Christopher Waller, both appointed by President Donald Trump, dissented in favour of a quarter-point cut. Waller is also among the potential contenders for the next Fed chair once Powell’s term ends in May.
Meanwhile, Trump said this week he plans to announce his nominee for the next Fed chair “pretty soon,” a decision closely watched by Wall Street as markets do not expect a rate cut until the summer.
In its latest policy statement, the Fed described economic growth as “solid,” an upgrade from the earlier assessment of “moderate” growth. Officials also noted that the unemployment rate has shown “some signs of stabilization,” reinforcing the case for maintaining the current policy stance.
Powell also offered advice for his eventual successor, urging the next Fed chair to remain clear of political entanglements.
“Stay out of elected politics,” Powell said, stressing that the Federal Reserve’s accountability lies with Congress through regular and transparent engagement.
Market analysts expect the Fed could still deliver rate cuts in 2026, though building consensus within a divided rate-setting committee may prove challenging, officials and economists noted.