Wall Street is digesting the Federal Reserve’s first monetary policy decision of 2026, which left interest rates unchanged.
The Federal Open Market Committee, which determines interest rates, kept its benchmark funds rate within a range of 3.5% to 3.75% despite ongoing pressure from the Trump administration to lower it.
U.S. central bank chief Jerome Powell described the economy as solid and noted reduced risks to inflation and employment, which may indicate a long wait before further cuts.
During his address, Powell hinted at Trump’s wish to control the Fed, while offering a strong defense of central bank independence, “The point of independence is not to protect policymakers or anything like that. It just is that every advanced economy, democracy in the world has come around to this common practice. It’s just an institutional arrangement that has served the people well, and that is to have a separation between — to not have direct elected official control over the setting of monetary policy.”
“The economy has once again surprised us with its strength,” Powell said at a press conference after the announcement.
Powell said the Fed remains “well-positioned” to assess future rate cuts. He noted that there could be numerous economic developments that might prompt the Fed to act further down the track, including a weakening labor market or inflation falling back toward the Fed’s 2% target, among other possibilities.
“Many of my colleagues think it’s hard to look at the incoming data and say that policy is significantly restrictive at this time.”
“The upside risks to inflation and the downside risks to employment have diminished. But they still exist,” Powell said. “We think our policy is in a good place.”
By CEO NA Editorial Staff
