The Federal Reserve announced on January 28, 2026, that the target range for the federal funds rate would remain unchanged at 3.50%-3.75%, in line with market expectations. This is the first pause after three consecutive rate cuts in 2025, mainly due to persistent inflation (December CPI year-on-year 2.7%) and a surprisingly stable labor market (unemployment rate 4.4%). Although non-farm payrolls added only 50,000 jobs in December, the economy continued to expand steadily, with GDP growth revised up to 4.4%. Voting members Milan and Waller opposed, advocating for a 25 basis point cut. The statement removed the phrase “downside risks to employment,” indicating a more optimistic outlook for the economy. The market expects possibly two rate cuts in 2026, with the first likely after the new chair takes office in June.