Federal Reserve January Decision Announced: Benchmark interest rate remains unchanged; if tariffs and inflation peak and then decline this year, policy can be eased.

BlockBeats News, January 29 — At 3:00 AM Beijing time today, the Federal Reserve announced in its first interest rate decision of 2026 that the benchmark rate will remain unchanged at 3.50%-3.75%, pausing the three consecutive rate cuts since September last year, in line with market expectations.

Goldman Sachs analyst Kai Hayashi stated that given strong economic data and signs of stabilization in the labor market, the Federal Reserve is likely to keep its policy unchanged for the time being. We expect the rate cut policy to restart later this year, as the slowdown in inflation allows the Fed to implement two more “normalization” rate cuts, bringing rates back to the neutral level deemed appropriate by Federal Open Market Committee members.

Federal Reserve Chair Jerome Powell said in a subsequent statement that there are some signs of stabilization in the unemployment rate, inflation remains slightly above target, and the labor market may be stabilizing after gradually softening. If tariffs’ inflation peaks and then falls this year, it will indicate that policy can be eased. Rate hikes are not a baseline assumption for anyone. No one expects a rate increase at the next meeting.

When asked whether the Federal Reserve has responded to a subpoena from the Department of Justice, Powell said he would not elaborate further on the subpoena statement. Regarding the next Fed chairperson, Powell remained tight-lipped, “Stay away from election politics, do not get involved in election politics. Don’t do that,” Powell said at the routine press conference after the latest monetary policy meeting.

After the rate decision was announced, gold and silver prices continued their previous rally. Spot gold briefly approached $5600 this morning, up nearly $600 this week, while spot silver broke through $119/oz, rising 1.91% intraday.