What we're covering here
• The Federal Reserve held interest rates steady Wednesday as expected, but two governors dissented, preferring a quarter-point cut.
• It’s the first time since July that the central bank has chosen to pause its rate-cutting cycle, having lowered rates three times last year as it monitored the economic effects of President Donald Trump’s aggressive policies.
• Federal Reserve Chair Jerome Powell opted to avoid questions about his extraordinary rebuke of the Trump administration earlier this month, when he announced he was the subject of a criminal probe that he categorized as a “pretext” to intimidate the central bank into cutting rates to the president’s liking.
Our live coverage of the Fed’s latest decision has ended. Click here for key takeaways from the central bank’s statement and news conference.
Stocks close mixed after Fed holds rates steady
Stocks were little changed Wednesday after the Federal Reserve’s decision to hold interest rates steady.
The Dow closed higher by 12 points, or 0.02%. The S&P 500 edged lower by 0.01%, closing at 6,978 points after briefly crossing 7,000 for the first time ever earlier this morning. The tech-heavy Nasdaq Composite gained 0.17%.
Fed Chair Jerome Powell in an afternoon press conference said economic growth is solid and signaled the central bank would assess future rate decisions on a meeting-by-meeting basis, maintaining its dependence on economic data.
“The message: the Fed is comfortable on pause … and could stay there for a while as it looks to confirm that the labor market is in the process of stabilizing, police the tariff-driven inflation peak still to come and assess the impact of fiscal stimulus from coming tax refunds,” Krishna Guha, vice chairman at Evercore ISI, said in a note.
The US dollar index was up 0.18%, pausing a recent slide that had put it at its lowest level in four years. Treasury yields, which rise when bonds fall, were slightly higher.
While the stock market was quiet, precious metals — considered havens amid uncertainty — soared higher, continuing a recent surge.
Gold was up 5.4% and hit an all-time high above $5,350 a troy ounce. Gold was up roughly $275, its largest single-day dollar gain on record. Gold was set for its biggest single-day percent gain since 2020.
Silver soared 10% and traded around $116 a troy ounce. Silver is up roughly 65% so far this year and on pace for its best month since 1979.
“A reasonable base case is that the Fed takes up 1-2 more cuts, but that process is likely to begin toward the middle of the year,” Jason Pride, chief of investment strategy and research at Glenmede, said in a note.
Here’s the best way to make the Fed pause work for your money
The Federal Reserve’s decisions influence – directly or indirectly – the rates on consumer savings and loan products throughout the US economy. And that affects what you’ll make on your money and pay on your debts.
What you should do in the wake of any Fed rate decision depends on whether your savings are well positioned to get the highest yield available and whether the interest rates you pay are as low as they can be, given your credit score and personal situation.
From money you don’t want to risk to debt that you want to pay off, here are some moves to consider making.
Powell says he and other Fed officials are committed to maintaining independence
At a time when the Federal Reserve is facing mounting challenges to its longstanding ability to act independently – and when the central bank head is facing a criminal inquiry – Chair Jerome Powell said Wednesday he and his colleagues are “strongly committed” to maintaining the central bank’s independence.
But he warned: “If people lose the faith that we are making decisions … only on the basis of our assessment of what is best for everyone for the wide public, rather than trying to benefit one group or another … it is going to be hard to retain it.”
“And we haven’t lost it. I don’t believe we will,” Powell said.
Powell's advice to his successor: "Don't get pulled in to elected politics"
Asked by CNN’s Matt Egan what advice Federal Reserve Chair Jerome Powell has for his successor, Powell replied, “Don’t get pulled in to elected politics.”
At the same time, he also stressed the need for Fed officials to be held accountable by Congress. “It is something you need to work hard at, and I have worked hard at it.”
Finally, he said, “It is easy to criticize government institutions in so many ways,” and while he added that not everyone is perfect at the central bank, “there isn’t a better cadre of professionals more dedicated to the public well-being than those who work at the Fed.”
Powell’s term as Fed chair ends in May this year. While President Donald Trump has four nominees in mind for his replacement, he has said the next leader of the central bank will be someone who cuts rates.
Stocks edge higher as Powell says economic growth is solid
US stocks were slightly higher Wednesday afternoon after Federal Reserve Chair Jerome Powell delivered remarks at an afternoon press conference.
The Dow was up 40 points. The S&P 500 gained 0.08%. The tech-heavy Nasdaq rose 0.32%.
Powell said the outlook for economic activity has improved and the Fed will assess incoming economic data before deciding on future interest rate cuts.
“Monetary policy is not on a preset course, and we will make our decisions on a meeting-by-meeting basis,” Powell said.
“The economy is growing at a solid pace, the unemployment rate has been broadly stable and inflation remains somewhat elevated, so we’ll be looking to our goal variables and letting the data light the way for us,” Powell said.
The Fed in its statement mentioned economic activity has been expanding at a “solid pace,” compared with a “moderate pace” in December.
“The [Fed]’s decision to hold rates was entirely expected,” Seema Shah, chief global strategist at Principal Asset Management, said in a note. “Recent data continues to show an economy still running hot, with strength across multiple fronts.”
The US dollar index was up 0.3%, paring earlier gains. Treasury yields were slightly hgher.
“Greed” was the sentiment driving markets, according to CNN’s Fear and Greed Index.
Powell: Not expecting prices to move significantly higher, barring any new tariff rate changes
Federal Reserve Chair Jerome Powell said the bulk of passthrough from higher tariffs over the past year to consumer prices is soon to be complete.
“The expectation is that we will see the effects of tariffs flowing through goods prices peaking, then starting to come down, assuming there are no new major tariff increases that are begun, and that is what we expect to see over the course of this year,” Powell told reporters on Wednesday.
Powell stressed, as he has several times before, that he views tariffs as a one-time price increase rather than an avenue to persistent price increases, i.e. ongoing higher inflation.
Powell says he attended Cook's Supreme Court hearing because it's "the most important" in the Fed's history
Federal Reserve Chair Jerome Powell was criticized by Treasury Secretary Scott Bessent for attending oral arguments last week at the Supreme Court. The case revolves around whether President Donald Trump had the legal authority to fire Fed Governor Lisa Cook over alleged – but unproven – mortgage fraud.
Powell defended his decision to attend, referring to the case as “perhaps the most important legal case in the Fed’s 113-year history.”
“As I thought about it, I thought it might be hard to explain why I didn’t attend,” he added.
Powell calls out housing market weakness
Federal Reserve Chair Jerome Powell called out weakness in the housing market at the start of the Fed’s news conference on Wednesday.
“Available indicators suggest that economic activity has been expanding at a solid pace. Consumer spending has been resilient, and business fixed investment has continued to expand,” Powell said. “In contrast, activity in the housing sector has remained weak.”
However, after years of stretched affordability, the housing market has begun showing signs of life in 2026.
Mortgage rates have hovered near a three-year low for two-straight weeks, and buyers are responding. Applications jumped 14% week over week in mid-January, and refinancing hit its busiest pace since September 2025, according to the Mortgage Bankers Association.
President Donald Trump has rolled out a flurry of housing-focused announcements in recent weeks. Earlier this month, he signed an executive order aimed at blocking large institutional investors from buying single-family homes – though such a ban would likely require congressional approval to take effect.
Trump also announced plans for Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities in an effort to push mortgage rates lower. While it is unclear how many of those purchases have begun, more buyers jumped into the market, said the chief business officer at Rocket Mortgage.
Rocket Mortgage, one of the largest mortgage lenders in the US, said it saw the highest volume of applications in more than a year in the days following Trump’s announcement.
Despite last month's tepid job gains, Fed officials cast upbeat tone about state of labor market
Federal Reserve officials are looking at the labor market with a glass half full.
Although employers hired just 50,000 workers last month, the most tepid job growth since December 2020, officials appeared to be encouraged by the unemployment rate, which fell to 4.4% in December from 4.5% the prior month.
In December, the Fed’s statement explaining its decision to lower rates by a quarter point read, “Job gains have slowed this year, and the unemployment rate has edged up through September.” The statement also said, “The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months.”
At this month’s meeting, where officials held rates steady, that part of the statement was modified to “Job gains have remained low, and the unemployment rate has shown some signs of stabilization.” And rather than saying the downside risks to employment rose, the statement simply said, “The Committee is attentive to the risks to both sides of its dual mandate.”
On Wednesday, Fed Chair Jerome Powell told reporters the changes were made to reflect new data they observed. But he cautioned, “I wouldn’t go too far with that.”
Taken together, the changes appear to signify officials are pleased by some labor market data and don’t feel urgency to cut rates.
3 reasons why the Fed held rates steady
The Federal Reserve had cut interest rates in three straight meetings, but the central bank broke its streak Wednesday by keeping rates right where they were.
They made the decision for three reasons:
1) Rate changes take time to work their way through the economy – sometimes many months. So, some voting members on the committee probably wanted to see how their previous work would take shape before approving another rate cut.
2) Inflation remains elevated, the Fed said. Rate cuts can cause prices to rise, as the cost of borrowing falls and consumers and businesses have more spending power.
3) Unemployment is stabilizing, and the economy is growing at a strong pace, the Fed said. In its post-meeting statement, the central bank changed its description of economic growth from “moderate” to “solid” after the third-quarter gross domestic product boomed, and the fourth quarter is expected to grow strongly again. The unemployment rate fell to 4.4% in December after rising throughout much of 2025.
So if the economy and job market show signs of improvement and inflation is still a bit of a concern, the Fed felt happy to stand pat and see if their previous three rate cuts are doing the trick – for now, anyway.
Stocks are mixed as Fed holds interest rates steady
US stocks were little changed Wednesday afternoon after the Federal Reserve announced it held interest rates steady, matching Wall Street’s expectations.
The Dow was up 20 points. The broader S&P 500 was down 0.05%, and the tech-heavy Nasdaq Composite was up 0.17%.
“Uncertainty about the economic outlook remains elevated,” the Fed said in a statement. “The Committee is attentive to the risks to both sides of its dual mandate,” referring to the central bank’s role of managing inflation and keeping unemployment low.
The US dollar index was up 0.5%, extending this morning’s gains. Treasury yields were slightly higher.
“We had expected this to be a nothingburger Fed meeting,” said Jay Hatfield, CEO at Infrastructure Capital Advisors.
Hatfield said it was notable that the Fed’s statement mentioned solid economic growth and a stabilizing unemployment rate, improving from the last meeting in December.
Traders’ attention now turns to Fed Chair Jerome Powell’s remarks at 2:30 p.m. ET.
Two Fed officials dissented at this month's meeting
Federal Reserve governors Stephen Miran and Christopher Waller both favored a quarter-point cut at the January policy meeting, dissenting from the other members of the central bank’s rate-setting committee, who opted to hold rates steady.
Waller is on President Donald Trump’s shortlist of candidates to replace Fed Chair Jerome Powell when his term expires in May.
Miran, who is Trump’s top economic adviser and who was nominated by the president last year to fill a temporary opening on the Fed’s Board of Governors, has now voted against the committee for the fourth consecutive meeting.
Fed holds interest rates steady as its independence comes under threat
The Federal Reserve on Wednesday kept interest rates unchanged as the US central bank fights to maintain its ability to set interest rates without political interference.
Officials kept their benchmark lending rate at a range of 3.5-3.75%, following three consecutive rate cuts late last year. Several policymakers have said in recent public speeches they want to see the effects of those rate cuts before considering any further reductions, suggesting a pause could last for a few months.
The Fed’s latest rate decision comes at a pivotal moment in the central bank’s 112-year history, as the Supreme Court reviews a case with significant implications for the Fed’s independence. Chair Jerome Powell himself pushed back against the Trump administration’s threats against the Fed’s independence earlier this month in a stunning video.
Stocks are little changed with just 15 minutes until Fed rate decision
It’s been a quiet day so far in the stock market, with the Dow, S&P 500 and Nasdaq all hovering around the flatline.
The Dow was flat as of 1:47 p.m. ET. The S&P 500 was down 0.1%. The Nasdaq gained 0.13%.
Wall Street traders are awaiting the Federal Reserve’s decision on interest rates at 2 p.m. ET, followed by Fed Chair Jerome Powell’s remarks at 2:30 p.m. ET.
While the Fed is in focus this afternoon, investors are also bracing for earnings reports from Meta (META), Microsoft (MSFT) and Tesla (TSLA) after the closing bell, followed by Apple (AAPL) on Thursday. Those companies make up four out of the so-called “Magnificent Seven” tech stocks that helped drive market gains across the past three years.
“This week is pivotal in setting the market’s near‑term tone as 2026 progresses,” Chris Brigati, chief investment officer at SWBC, said in a note. “History shows that a strong January often frames the narrative for the rest of the year, with investor psychology playing an outsized role.”
Meanwhile, gold and silver soared higher amid lingering geopolitical uncertainty. Gold rose 4.7%, while silver surged 7.3%.
US Treasury yields, which rise when bonds fall, were slightly higher. The dollar index was up 0.38% after Treasury Secretary Scott Bessent told CNBC this morning that the United States has a “strong dollar policy,” tempering nerves about the dollar’s recent slide.
“Reversing the signal now is consistent with past mixed signals from the Trump administration on the dollar, but also reveals an activist macro trader’s approach to operating Treasury policy — toggling the signals to try to manage the FX market,” Krishna Guha, vice chairman at Evercore ISI, said in a note.
Yes, the labor market has weakened. No, that doesn't guarantee a rate cut
Outside of recessions, last year was one of the weakest labor markets in decades. Additionally, the latest jobs report from December showed employers hired just 50,000 new workers — the most tepid job growth since December 2020, when employers laid off a net 183,000 workers.
On the surface, that, on top of other recent lackluster labor market data, would appear to make rate cuts a surefire thing for the Federal Reserve, given that it is tasked with setting rates at levels to promote maximum employment. (Generally speaking, lower rates can help boost the labor market by reducing employers’ borrowing costs, thereby freeing up funds to hire more workers.)
But the labor market is only half of the Fed’s responsibility; the other half is price stability (i.e. preventing higher inflation.) Cutting rates too quickly or by too much can help fuel higher inflation, especially at a time when higher tariffs and other factors are driving businesses to raise prices.
With both sides of the equation in mind, economists at Morgan Stanley anticipate the Fed will hold rates steady for longer than they previously forecast.
“Labor demand sill remains soft – with private payrolls rising by only 37k in December and 29k on a three-month moving average – but we think the Fed can live with slower employment growth so long as the unemployment rate is stable (or falling),” they said in a note earlier this month. Their expectation now is that the next rate cut will come in June.
Consumer confidence crisis?
America’s economic mood deteriorated in January to its lowest level in more than a decade as consumers fretted about geopolitical tensions, affordability and President Donald Trump’s unrelenting trade war.
Americans haven’t been in this bad of a mood about the economy since 2014, according to the closely watched Consumer Confidence Index. This month, the index fell 9.7 points to its lowest reading in nearly 12 years.
Put another way: Even in the depths of the 2020 pandemic, consumers were more confident about the economy than they are now, according to the index, which is published by the nonprofit think tank The Conference Board.
To be sure, these sentiment surveys tend to tell us more about what Americans believe than about how they truly are. In recent years, especially, the gap between what consumers say they’re feeling and how they’re actually spending their money has been widening.
So this sour January mood might not translate into less spending. A separate survey from the University of Michigan that emphasizes folks’ views about their personal finances hit a five-month high in January.
That might be why Wall Street was so unbothered by the confidence reading Tuesday. US stocks hit record highs thanks to plenty of optimism about corporate earnings.
Read more here.
Why Powell finally drew a line with Trump
The extent of the standoff between the Trump administration and the Federal Reserve was revealed earlier this month when Fed Chair Jerome Powell announced that he had been subpoenaed by the Department of Justice.
Powell, who has faced months of pressure from President Donald Trump to lower rates, responded with an unusually blunt video, saying the investigation was a “pretext” to intimidate the central bank into cutting rates to the president’s liking.
The rebuke of Trump was in some ways even more shocking than a criminal investigation into a sitting Fed chair.
Throughout his second term as chair – and for much of his first – Powell remained tight-lipped even as Trump called him every name in the book and repeatedly threatened to fire him, assaults that Powell dismissed a “distraction” from the Fed’s work. Powell has said his one and only focus is the Fed’s politically independent mission to maintain maximum employment and low inflation.
Even after the criminal probe was revealed, Powell focused again on defending the Fed against the Trump administration’s attack on its independence — and, more broadly, the US economy.
Read more here.
Wall Street candidate for Fed chair gains momentum
BlackRock’s Rick Rieder is thought to be the current frontrunner in the search for a replacement for Federal Reserve Chair Jerome Powell.
While the decision is still fluid, people familiar with the matter told CNN that the finance executive left a positive impression on those in attendance at his recent sit-down interview with President Donald Trump.
For months, the Trump administration has teased a long list of candidates to take over when Powell’s term as chair ends in May. Treasury Secretary Scott Bessent has spearheaded the search for the key economic role, presenting Trump with four final candidates ahead of the expiration of Powell’s term: National Economic Council Director Kevin Hassett; former Fed Governor Kevin Warsh; Fed Governor Christopher Waller; and Rieder, BlackRock’s chief bond investment manager.
Last week, Trump indicated that he has narrowed down the field. In a speech at the World Economic Forum in Davos, Switzerland, he repeated his preference that Hassett, long seen as the front-runner, remain in his current role.
And in an interview with CNBC that same day, Trump said Rieder was “very impressive.”
Read more here.
Trump again signals Hassett won't be Fed chair
President Donald Trump again indicated that he’s reluctant to tap Kevin Hassett to run the Federal Reserve, saying Wednesday that “I don’t want to lose him.”
“My only problem is I don[t want to lose him,” he said of Hassett, who currently heads the National Economic Council. “I will tell you that he’s working from a big deficit, because I don’t want to lose him. He’s so good.”
Trump’s comments marked the second time in recent weeks he’s expressed concern about letting Hassett leave the White House, ahead of an announcement of his pick for Fed chair expected in the coming days.
Hassett was seen as the frontrunner for the job for months, due in large part to his close relationship with Trump. But the president has weighed three other candidates, while indicating that he likes Hassett’s ability to defend him in public as part of his economic team.
