The Federal Reserve will likely hold rates steady at its January meeting, even as Jerome Powell faces mounting pressure from Trump amid the DOJ probe.
The Federal Reserve will make its first rate decision of the year on Wednesday — and all eyes are on Chair Jerome Powell.
The central bank’s leaders have a near-total chance of holding rates steady this week, according to market-based projections from CME FedWatch. After three cuts in 2025, the Fed has penciled in one rate cut for the new year. In the long run, these rate decisions will affect the job market, consumer prices, and corporate America.
But there’s a shadow over January’s Fed meeting: The Department of Justice recently launched a probe into Powell’s handling of renovations to the central bank’s buildings. The Trump administration alleges that the chair gave false testimony at a June Congressional appearance, though Powell said the move should « be seen in the broader context of the administration’s threats and ongoing pressure » on the Fed.
« This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions or whether instead monetary policy will be directed by political pressure or intimidation », he said in a video statement released January 11.
