Federal Reserve holds rates steady as policymakers flag elevated uncertainty

The Federal Reserve left interest rates unchanged on Wednesday, January 28, 2026, opting to hold the federal funds target range at 3.5% to 3.75% after reviewing fresh data on growth, jobs and inflation.

In its post‑meeting statement, the Fed said economic activity has been expanding at a solid pace while job gains have remained low and the unemployment rate is showing signs of stabilizing. At the same time, inflation is still described as “somewhat elevated,” keeping pressure on policymakers to avoid easing too quickly.

Officials also emphasized that uncertainty about the economic outlook remains elevated. The statement reiterated the Fed’s dual mandate—maximum employment and 2% inflation over the longer run—and noted the committee is attentive to risks on both sides of that mandate.

The decision to hold steady was not unanimous. Two voting members preferred a 0.25 percentage point cut at this meeting, highlighting an internal divide about how much insurance the Fed should provide if the labor market cools further while inflation remains above target.

The Fed said it will continue to assess incoming information—covering labor conditions, inflation pressures and expectations, and financial and international developments—and would adjust policy if risks emerge that threaten its objectives. Markets are now focused on what future data will imply for the timing of any additional cuts in 2026.