The Federal Reserve kept the federal funds rate unchanged at 3.5%–3.75% on Wednesday, putting its easing cycle on hold after three rate cuts last year that brought borrowing costs to their lowest since 2022.

In its January 2026 statement, the Federal Open Market Committee said economic activity continues to expand at a “solid pace,” upgrading its language from a "moderate pace" in the previous statement.

It also said the unemployment rate has shown "some signs of stabilization," replacing earlier language that it had "edged up," while keeping its view that inflation "remains somewhat elevated."

Fed Chair Jerome Powell will hold his press conference at 2.30 p.m. ET, as investors brace for his response to escalating political pressure on the central bank.

Earlier this month, the Department of Justice served the Federal Reserve with grand jury subpoenas tied to Powell's testimony before the Senate Banking Committee last June, which addressed a multi-year renovation project involving historic Fed office buildings.

"Those are pretexts," Powell said in his Jan. 11 speech.

"The 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," he added.

Image created using artificial intelligence via Midjourney.