Investors now eye the next policy meeting in March.
The Federal Reserve hit the brakes on its easing cycle and left interest rates unchanged in the central bank’s first policy decision of the year.
Officials voted 10–2 to keep the benchmark federal funds rate—a key policy rate that influences borrowing costs for businesses and consumers—in a range of 3.5 percent to 3.75 percent.
In a post-meeting statement, officials said uncertainty about the economic outlook remained elevated.
“Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated,” the Federal Open Market Committee (FOMC) said.
Additionally, the latest statement removed a portion that noted a higher risk of a weakening labor market than rising inflation. This could signal that officials could adopt a wait-and-see approach to crafting monetary policy to achieve its dual mandate of maximum employment and price stability.
“In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks,” the statement said.
Fed Govs. Stephen Miran and Christopher Waller—both appointed by President Donald Trump—were the lone dissenters. They voted against holding policy steady and instead advocated for a quarter-point cut.
Miran was selected to temporarily fill a seat on the Board of Governors in September 2025. His term expires on Jan. 31, and it is unclear if he will be reappointed to the role.
Waller has been interviewed to be the next head of the Federal Reserve, although prediction markets suggest he is a longshot.
The widely expected decision was the first time since the summer that the Fed did not make a move on rates.
By Andrew Moran
