January Federal Reserve Meeting Overview
The Federal Reserve (Fed) concluded its first policy meeting of 2026 on January 28th, opting to hold interest rates steady. Below is an overview of the key takeaways from the meeting and what this may mean moving forward:
1. Interest rates remain unchanged after previous cuts.
After cutting its benchmark interest rate by 0.25% at each of its final three meetings of 2025, the Fed voted to maintain the federal funds target range at 3.50%–3.75%.
Both the Fed and Fed Chair Jerome Powell reiterated their intentions to monitor incoming data and adjust their policy stance as appropriate, emphasizing that monetary policy decisions will continue to be made on a meeting-by-meeting basis.
2. Labor market showing signs of stabilization.
In his post-meeting press conference, Powell noted that job gains remain low but highlighted that officials had observed signs of stabilization in the unemployment rate. The unemployment rate stood at 4.4% as of the most recent data in December 2025.
Other labor market indicators, such as job openings, layoffs, and wage growth, have shown little change in recent months. The Fed cited slower labor force growth, meaning fewer people working or looking for work, as a factor. This is due in part to lower immigration and labor participation.
3. Inflation remains elevated but is gradually easing.
While inflation has fallen from previous highs, it still exceeds the Fed’s long-term goal of 2%. In his post-meeting press conference, Powell noted that recent inflation pressures have been influenced by goods-sector prices, including the effects of tariffs.
Disinflation (the slowdown in the pace of price increases) has continued in the services including health care, housing, and transportation. Meanwhile, long-term inflation expectations, or what businesses and consumers expect prices to do over the next several years, remain in line with the Fed’s target.
4. Economic outlook and policy stance.
Powell described the U.S. economy as entering 2026 “on a firm footing,” making note of steady consumer spending and modest business investment. However, Powell noted a few continued problem areas: activity in the housing sector remains weak and recent government shutdowns have temporarily weighed on economic output.
Powell stated that the Fed’s current policy stance is appropriate to support progress toward its dual mandate of maximum employment and stable prices.
5. Committee signals wait-and-see approach.
The Fed’s post-meeting statement and Powell’s remarks emphasized that monetary policy is not on a “pre-set course,” meaning the Fed is not following a fixed plan for interest rate decisions. Instead, the Fed will assess data related to labor markets, inflation, financial conditions, and broader economic developments before determining any future adjustments to interest rates at each meeting.
6. What this could mean for your finances.
- Mortgage rates may stay level out for now. Rates have moved lower since late 2025 and have been near previous three-year lows. Going forward, broader economic factors, including inflation trends and investor sentiment, will likely continue to influence borrowing costs.
- Credit card interest may ease slightly. While the Fed’s rate cuts in late 2025 led to a slight decline in average credit card rates, the decision to hold rates steady is not expected to drive further near-term relief. Rates remain elevated overall, and any additional relief will likely be gradual.
- Savings yields may hold. High-yield savings accounts and CDs are still offering comparatively strong yields, especially relative to inflation. Since deposit rates tend to follow the Fed’s benchmark, the pause in rate changes could mean a period of stability for savers.
- Market volatility may continue. With diverging opinions among policymakers and continued political and economic uncertainty, market volatility may remain a possibility.
- Long-term planning remains key. Staying focused on your long-term financial goals, and revisiting your strategy when appropriate, can help you navigate shifting conditions with greater confidence.
As always, Emerald pays close attention to key economic data and policy shifts. We will work to continue communicating about these developments as they occur. If you have any immediate questions or would like to talk through your current strategy, don’t hesitate to reach out. We are here to help.
FOOTNOTES
Federal Reserve decision + “meeting-by-meeting / not preset course” language. Federal Reserve Board, Federal Reserve issues FOMC statement (Jan. 28, 2026); and Transcript of Chair Powell’s Press Conference — January 28, 2026.
“Final three meetings of 2025” quarter-point cuts and resulting ranges. Federal Reserve Board, Federal Reserve issues FOMC statement (Sep. 17, 2025; Oct. 29, 2025; Dec. 10, 2025).
Labor market / unemployment rate (Dec. 2025) + Powell remarks. Federal Reserve Board, Transcript of Chair Powell’s Press Conference — January 28, 2026; and U.S. Bureau of Labor Statistics, The Employment Situation — December 2025 (Jan. 9, 2026) (unemployment rate 4.4%).
Inflation / 2% goal / tariffs / services disinflation / expectations. Federal Reserve Board, Transcript of Chair Powell’s Press Conference — January 28, 2026.
Economic outlook / “firm footing” / consumer spending & investment / housing weak / shutdown impact / policy stance. Federal Reserve Board, Transcript of Chair Powell’s Press Conference — January 28, 2026.
Dual mandate reference. Federal Reserve Board, Federal Reserve issues FOMC statement (Jan. 28, 2026) (maximum employment; inflation returning to 2%).
Household finance implications (rates/savings/volatility) – representative public sources. Freddie Mac, Mortgage Rates Remain Lower and Steady (Jan. 2026); Federal Reserve, G.19 Consumer Credit (terms/credit card rates definitions and reported series); FDIC, National Rates and Rate Caps (Jan. 2026) (deposit-rate framework and relationship to benchmark measures); Federal Reserve Board, Transcript of Chair Powell’s Press Conference — January 28, 2026 (uncertainty/risks).
Disclosure: This commentary reflects general economic and market information as of the date indicated and may change without notice. Any forward-looking statements (including expectations about interest rates, inflation, markets, and borrowing or savings rates) are based on current conditions and assumptions and are not guarantees of future results. Economic data and rates are subject to revision and may differ from actual outcomes. This information is general in nature and may not be applicable to your specific circumstances.
Emerald Advisors, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
