Fed expected to hold rates steady with no clear timeline for next cut
Jan 27, 2026
Federal Reserve officials are expected to pause interest rate cuts this week after three consecutive reductions since September, signaling growing uncertainty over when—or if—borrowing costs will move lower again in 2026, The Wall Street Journal writes.
Inflation remains stuck near 2.8%, abov
e the Fed’s 2% target, while job growth has slowed but not deteriorated enough to force further easing.
The result is a central bank in wait-and-see mode, with policymakers divided over how to interpret recent data and how much weight to give tariff-driven price pressures. Analysts say additional cuts are unlikely before midyear unless the labor market weakens more sharply, with some forecasting the next move as late as September.
The Fed is expected to keep its benchmark rate in a 3.5% to 3.75% range, maintaining flexibility while seeking clearer evidence that inflation is sustainably moving lower.
For businesses and investors, the pause adds uncertainty around financing costs, hiring plans and capital investment decisions.
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Federal Reserve
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