The Federal Reserve paused interest rate cuts on January 28, 2026, keeping its benchmark near 3.6% after three reductions last year. Chair Jerome Powell said the economic outlook has clearly improved since December, a shift expected to support hiring. In its statement, the central bank noted growing signs that the labour market is stabilising.
With growth healthy and unemployment levelling off, policymakers see little urgency to cut further. Most anticipate easing later in 2026, but want clearer proof inflation is cooling toward the 2% target. The Fed’s preferred gauge showed inflation at 2.8% in November, slightly above a year earlier.
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