Fed Meeting Today News: Borrowers hoping for further relief from the Federal Reserve may have to wait a little longer, as the central bank is expected to hold off on cutting rates further at its Jan. 29 meeting.
The Fed is likely to maintain its current benchmark interest rate, which is between 4.25% and 4.5%, according to a survey of economists by FactSet. Most experts also predict there will be no rate cut during the Fed’s March 19 meeting. The next potential rate cut based on the latest forecasts could be delayed until the Fed’s May 7 meeting.
If the Fed takes a pause in January, it would put a temporary hold on rate cuts starting in September 2024. These cuts, which have lowered the federal funds rate by a full percentage point, have helped lower the cost of borrowing on credit cards, home equity lines of credit and other loans, providing some financial relief to businesses and consumers facing inflation.
However, the Fed’s December statement indicated that it now expects to cut rates less than initially planned in 2025. Chairman Jerome Powell pointed out that inflation is still above the Fed’s 2% annual target, and experts believe the central bank will take a cautious stance while monitoring inflation and other economic factors.
“There is concern that lowering rates further could lead to a rebound in inflation,” said Erasmus Kersting, an economics professor at Villanova University. “The Fed is also cautious because of potential inflationary pressures from policies such as new tariffs and mass deportations under the Trump administration.”
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Fed Meeting Today Key points: What to expect from the Fed rate pause
When will the Fed make its next rate decision?
The Federal Reserve will announce its decision on January 29 at 2:00 p.m. EST, followed by a press conference with Chairman Jerome Powell at 2:30 p.m. EST.
How will the rate pause affect my finances?
After the Fed made three rate cuts in 2024 – including a significant 0.5% cut in September – many borrowers were expecting more relief in 2025. However, the anticipated stagnation means that borrowing costs are unlikely to change immediately. This applies to mortgages, car loans and credit cards.
While borrowing costs won’t drop much, savers can still benefit from competitive rates on high-yield savings accounts, though those rates have fallen from last year’s highs. Some accounts are still paying interest rates above 4%, down from nearly 5% a year ago.
What about mortgage rates?
Mortgage rates remain high despite the Fed’s rate cuts, with the average 30-year mortgage remaining close to 7%. This is due to factors beyond the Fed’s control, including macroeconomic trends and changes in U.S. Treasury bond yields. Mortgage rates may remain high for the time being because of inflation concerns, particularly concerns related to the Trump administration’s policies.
“Until there is more clarity about the economic impact of policies such as tariffs, taxes and immigration laws, mortgage rates are likely to remain stable,” said Austin Walker, CEO of A. Walker & Co., a housing finance firm.
Can President Trump influence the Fed’s rate decisions?
At the World Economic Forum in Davos, Switzerland, President Trump suggested that interest rates should fall immediately. However, experts say it is unlikely that Trump can directly influence the Fed’s decisions. The Federal Reserve operates independently and makes its decisions based on economic data rather than political pressure.
The Federal Open Market Committee (FOMC), which sets rates, has 12 members – seven from the Fed’s Board of Governors and four reserve bank presidents, of whom the President of the Federal Reserve Bank of New York serves as a permanent member.. Current Fed Chairman Jerome Powell has said he would not resign if Trump asked him to, adding that the president does not have the authority to remove or demote him.
When can we expect future rate cuts?
Economists are forecasting more rate cuts in 2025, but none are expected until May or later. However, uncertainty over the new administration’s policies could impact the outlook. EY chief economist Gregory Daco predicts three 0.25% rate cuts this year — possibly in March, June and September — but emphasized that the Fed would proceed cautiously because of the possibility of inflation rising again.
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With 5.5 years of experience in financial journalism, I am a content writer who specializes in international markets. My aim is always to deliver unbiased and factual reporting.