The Federal Reserve announced it will maintain interest rates at the same level set last month, with no changes made to the target federal funds rate of 4.25% to 4.5%. This decision, while widely anticipated by financial markets, defies President Donald Trump’s wishes.
The Fed’s policy-setting Federal Open Market Committee agreed unanimously on holding rates firm, citing stabilization in unemployment and concerns over inflation remaining elevated. The pause breaks a three-meeting streak of rate cuts since September.
Markets showed little reaction to the announcement, with the S&P 500 declining slightly and benchmark 10-year US government bond yields increasing by two basis points. Chief Critic President Trump had urged the Fed to lower rates immediately, but Fed Chairman Jerome Powell remained silent on this matter.
The decision maintains restrictive monetary policy, keeping interest rates above sub-3% levels set from 2009 to 2021. Inflation remains above the 2% target for 45 consecutive months, while economic growth and low unemployment continue, making rate cuts less pressing.
Source: https://www.forbes.com/sites/dereksaul/2025/01/29/federal-reserve-pauses-interest-rate-cuts-first-meeting-without-a-cut-since-july