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

January 28, 2026 11:28 AM EST

What Is the Fed Expected to Do Today?

FROM 2 minutes 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 a Fed Meeting?

FROM 21 minutes 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.