US, Jan 29 : The US Federal Reserve has kept its benchmark interest rate unchanged at 3.5 to 3.75 per cent following its January 27–28 policy meeting, pointing to modest job growth, signs of labour market stability and inflation that remains above target.
In its policy statement issued on January 28, the Federal Open Market Committee said it voted to maintain the existing target range for the federal funds rate, a decision that broadly matched market expectations. The vote was 10–2, with Governors Christopher Waller and Adriana Miran dissenting in favour of a 25 basis point reduction.
Powell strikes measured tone
Federal Reserve Chair Jerome Powell adopted a cautiously hawkish stance during his post meeting press conference, particularly on economic momentum. He said the US economy is entering 2026 “on a firm footing” and noted that the outlook has improved since the previous meeting.
Powell added that monetary policy is “well positioned” at current levels and emphasised that future decisions would remain data dependent, with adjustments considered on a meeting-by-meeting basis.
Inflation still above target
The central bank reiterated its commitment to its dual mandate of maximum employment and price stability, with a long-run inflation goal of 2 per cent. While acknowledging that inflation has eased from earlier peaks, the Fed said price pressures remain elevated.
At the same time, the statement noted that job gains have been limited and the unemployment rate has shown signs of stabilisation.
Policy flexibility retained
The FOMC said it will continue to assess incoming economic data, shifting risks and global developments when determining the timing and scale of any future policy changes. It also reaffirmed its readiness to adjust its stance should conditions threaten progress toward its objectives.
The decision follows a 25 basis point rate cut announced in December 2025. The Fed’s next policy meeting is scheduled for March 17–18.