Central Bankers Likely Won’t Move Interest Rates, But Sparks May Still Fly

January 28, 2026 12:58 PM EST

Will Powell Engage with Questions About Trump? Probably Not, Economists Say

FROM 5 minutes ago

All the economic questions may be overshadowed by President Donald Trump’s attempts to reshape the central bank.

“Powell’s press conference might be dominated by questions about politics rather than policy,” BofA’s Bhave wrote.

Trump has repeatedly slammed the Fed for not cutting interest rates more quickly, arguing that high borrowing costs hold back the economy. 

The tensions reached a new high this month, with Powell pushing back on Department of Justice subpoenas relating to the Fed’s headquarters renovations. In a video response, Powell said he kept lawmakers informed about the costs and that they were “pretexts” for Trump to intimidate the Fed into slashing rates.

However, Powell has in the past been unwilling to engage in those conversations during the press conferences following meetings and likely will continue that trend today, economists said. 

“Powell will be peppered with questions about Fed independence, but he will likely duck most of them,” wrote Andrew Grantham, an economist at CIBC, wrote in a commentary.

-Polo Rocha

January 28, 2026 12:29 PM EST

With All Eyes on the Press Conference, What Will Powell Say About Policy?

FROM 34 minutes ago

Analysts also don’t expect Powell to say much on the Fed’s rate plans for the year. He might offer a slight indication that the Fed may cut rates again, but provide little guidance on when.

“While Powell is likely to sound noncommittal around near-term rate cuts, we expect him to remind market participants that the median Fed official still looks for easing this year,” wrote Oscar Munoz, chief U.S. macro strategist at TD Securities. “The path of least resistance continues to be further rate cuts.”

-Polo Rocha

January 28, 2026 12:03 PM EST

What Could Move Markets Today?

FROM 1 hour ago

Major equities indexes ticked higher Wednesday ahead of the Federal Reserve’s decision on whether it will hold interest rates steady.

The yield on the 10-year Treasury—which affects interest rates on a variety of consumer loans, including mortgages—ticked higher to about 4.26% from its Tuesday close of 4.25%.

However, if Federal Reserve Chair Jerome Powell says anything unexpected at Wednesday’s press conference, you’ll likely see it reflected in prices for your financial assets, especially in bonds tied to inflation expectations.

That’s one of the conclusions of a paper by researchers at the Federal Reserve Bank of San Francisco who studied what happens when officials at the Federal Reserve say something surprising in their official policy statements, or in the Fed chair’s traditional post-meeting press conference.

“Monetary policy news from press conferences—whether in isolation or in conjunction with the news in the associated statement—is a particularly important source of information, with strong effects on Treasury yields and prices of risk assets,” researchers at the bank led by Miguel Acosta, a professor of economics at the University of Wisconsin, Madison, wrote in the paper, published last month.

To follow along with market reactions, click here.

To read more about how Fed press conferences are what typically cause the market to move, click here.

-Aaron Rennie, Diccon Hyatt

January 28, 2026 11:28 AM EST

What Is the Fed Expected to Do Today?

FROM 1 hr 35 min ago

Financial markets widely expect the Federal Open Market Committee to put a lid on its recent string of rate cuts on Wednesday.

Traders are pricing in a 97% chance the Fed will leave rates unchanged at a range of 3.5% to 3.75%, according to the CME Group’s FedWatch tool, which forecasts rate movements based on fed funds futures trading data.

After cutting the rate by a quarter point for a third time in a row in December, most officials have shown little appetite for further rate cuts, which influence borrowing costs on all kinds of loans.

Inflation has remained above the Fed’s target since 2021, while the job market has been hit by a hiring slowdown. Fed officials are in something of a dilemma, though recent signs suggest both problems are improving. To make matters more complicated, recent data about inflation and the job market have been skewed by the government shutdown in October and November.

Among the FOMC’s 12 members, only Governor Stephen Miran has advocated for steep rate cuts.

“We expect the FOMC to keep rates unchanged at the January meeting, with one dissent from Governor Miran in favor of a cut,” economists at Nomura led by Aichi Amemiya, wrote in a commentary. “Powell is likely to reiterate that there is a higher bar to easing following last year’s insurance cuts.” 

To read more about what to expect in today’s policy decision, click here.

-Diccon Hyatt

January 28, 2026 11:10 AM EST

What Happens At Fed Meetings?

FROM 1 hr 53 min ago

The Federal Open Market Committee is the body that sets policy for the Federal Reserve System, the United States’ central bank. The committee members meet eight times a year in a two-day, closed-door meeting.

Their primary policy tool is the fed funds rate . The Fed’s use of interest rates to influence the economy is called monetary policy.

The 12 members of the FOMC cast votes to decide whether to raise, lower, or leave their key interest rate unchanged. Voters include the seven board governors, the president of the Federal Reserve Bank of New York, and four other regional bank presidents, who serve rotating one-year terms.

At each FOMC meeting, the committee members discuss economic and financial conditions and how those factors should affect their decision. The FOMC issues a public statement about its decision at 2 p.m. on the Wednesday the meeting concludes.

The Fed chair, currently Jerome Powell, typically hosts a press conference afterward to explain the decision.

To read more about what goes on behind FOMC meetings’ closed doors, click here.