Fed holds rates at 3.50%-3.75% on Jan. 29; Powell signals potential easing if tariff inflation cools

The Federal Reserve held the benchmark interest rate at 3.50%-3.75% on Jan. 29 in its first 2026 decision, pausing after three consecutive cuts since last September and matching market expectations, BlockBeats reports. In a subsequent briefing, Fed Chair Jerome Powell said the unemployment rate had shown signs of stabilizing, inflation remained slightly above target, and the labor market that had gradually softened might be steadying; he added that if this year's tariff inflation peaks and then declines, it would indicate room to ease policy, and noted rate hikes were not anyone's base case, with no one expecting an increase at the next meeting. Asked whether the Fed had responded to Justice Department subpoenas, Powell declined to elaborate, and he likewise offered no comment on the selection of the next Fed chair, emphasizing a stance of staying away from election politics. Goldman Sachs analyst Jan Hatzius said strong economic data and signs of labor-market stability suggest policy will remain on hold for now and projected cuts would resume later this year with two normalization moves to bring rates back to a level FOMC members consider neutral, while after the decision spot gold briefly approached $5,600 with a weekly gain of nearly $600 and spot silver topped $119 per ounce, up 1.91% intraday, BlockBeats reports.