- Federal Reserve Chair Jerome Powell offered an upbeat report on the U.S. economy after the first policymaking meeting of 2026, citing surprising strength.
- The Federal Open Market Committee voted 10-2 to hold interest rates steady at 3.50% to 3.75% after three consecutive cuts of 25 percentage points in 2025.
- Powell declined to comment on future interest-rate cuts, stating decisions will be made meeting-by-meeting based on data and outlook.
- The Fed’s dual mandate requires balancing inflation and job growth via interest rates, which can conflict due to global events.
- Market reaction was muted after the Fed’s decision to keep rates unchanged, with the S&P 500 closing flat on the day.
- The Fed last paused interest rates in September 2023 to assess the impact before resuming rate cuts in 2025.
- Powell expressed confidence in the economy’s strength and growth, noting signs of stability in the labor market.
- Powell emphasized the need for further progress in easing rates due to elevated inflation levels.
- The CME Group FedWatch Tool estimates potential quarter-percentage point cuts in March, April, and June.
- Despite political pressure and drama, Powell emphasized the importance of the Fed’s independence and advised the next chair to stay out of elected politics.
Read more at Yahoo Finance: Fed Chair Powell sends frustrating message on future interest-rate cuts