The Fed on Wednesday kept interest rates in the current range, a move that was widely expected in spite of intensifying pressure from President Trump and the criminal probe into Fed Chair Jerome Powell.<\/b>
\nThe Fed on Wednesday kept interest rates in the current range, a move that was widely expected in spite of intensifying pressure from President Trump and the criminal probe into Fed Chair Jerome Powell.
After three consecutive quarter-point cuts in 2025, the central bank maintained rates in the 3.5% to 3.75% range at its first meeting of the year, in a 10-2 vote.
Policymakers opted to take a wait-and-see approach after months of weighing inflation risks against unemployment \u2014 likely assuaged by recent economic reports revealing strong GDP figures and a fairly resilient labor market.
Interest rates are currently in the \u201cneutral\u201d range, meaning they are not significantly restraining or promoting growth, but most Fed officials have projected further rate cuts this year.
\u201cI\u2019d characterize today\u2019s meeting as a very boring meeting during very interesting times,\u201d Christian Hoffman, head of fixed income at Thornburg Investment Management, said in a note Wednesday.
\u201cAny day now, I expect we\u2019ll learn who Powell\u2019s successor will be, and I wouldn\u2019t be surprised if an announcement is timed to the current meeting \u2026 Trump, paradoxically, wants a new chair who is sympathetic to his views and also credible to investors.\u201d
BlackRock exec Rick Rieder and former Fed Governor Kevin Warsh are currently seen as the president\u2019s front-runners to replace Powell on prediction markets.
As part of the Fed\u2019s annual rotation in January, it has added four new members to its 12-person voting committee.
Three of those new members have expressed opposition to some of last year\u2019s interest rate cuts, advocating for a more cautious approach.
Meanwhile, Trump\u2019s attacks on Powell \u2014 whose term as chairman expires in May \u2014 have heated up as the president has continued to call for a more aggressive rate-cutting path.
Earlier this month, Powell revealed that he\u2019s under criminal investigation for allegedly lying during congressional testimony last summer over the Fed\u2019s $2.5 billion headquarters renovation in DC.
\u201cThe threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president,\u201d Powell said in a stunning video statement.
\u201cThis is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions \u2014 or whether instead monetary policy will be directed by political pressure or intimidation.\u201d
Trump first nominated Powell to lead the Fed at the start of his first presidential term, but he has since threatened to fire the chairman several times \u2014 calling Powell \u201cstupid\u201d and claiming he has \u201cmental problems.\u201d
Wednesday\u2019s interest-rate decision also follows Supreme Court arguments last week in a lawsuit over whether Trump can fire Fed Governor Lisa Cook over alleged mortgage fraud.<\/p>\n