Business & Economics
Fed Freezes Rates at 3.50–3.75% Despite Trump Pressure Ahead of Powell Succession
On 28 Jan 2026 the FOMC ended a run of three quarterly cuts by voting 10-2 to keep the federal-funds rate unchanged at 3.50–3.75%, openly rebuffing President Trump’s calls for cheaper money.
Focusing Facts
- Governors Christopher Waller and Stephen Miran cast the only dissents, advocating a 0.25-point cut.
- The Fed had reduced rates at its three previous meetings (Sep, Oct, Dec 2025) before this pause.
- Chair Jerome Powell’s term expires in May 2026, with Trump expected to name a successor within weeks amid a DOJ probe of the Fed’s renovation project.
Context
Political jousting over U.S. monetary policy is hardly new: Harry Truman’s 1951 battle with the Fed produced the Treasury-Fed Accord, and Richard Nixon’s arm-twisting of Arthur Burns in 1971 helped stoke the inflation that followed. Today’s pause reprises that old tension, but in a world where central-bank independence, once seen as settled orthodoxy after the 1990s wave of inflation-targeting regimes, is eroding under populist governments from Brasília to Budapest. A rate freeze at 3.75% is trivial day-to-day, yet the precedent—White House subpoenas and an impending leadership overhaul aimed at shifting policy—could shape the institutional balance of power for decades. If the Fed bends, future presidents may treat monetary easing as just another lever, much as late-19th-century leaders treated the gold standard. If it holds, the 2026 showdown may be remembered as another 1951-style reaffirmation of autonomy. Either way, the decision matters less for this quarter’s GDP print than for whether an independent technocracy can survive the next hundred-year political cycle.
Perspectives
Financial and business press
Economic Times, Forbes, Zawya, Financial Post — Portrays the Fed’s rate-hold as a prudent, data-driven show of institutional independence meant to tame still-elevated inflation and reassure markets. These outlets cater to investors and policy elites, so they largely echo central-bank orthodoxy and downplay populist arguments for cheaper credit or the political costs of tight money.
Right-leaning U.S. media
Washington Times, Las Vegas Review-Journal — Frames the decision as the Fed ‘ignoring’ President Trump’s call for more rate cuts, stressing the administration’s view that lower borrowing costs are needed to turbo-charge growth. Coverage is sympathetic to Trump’s policy agenda and therefore casts the central bank as an obstacle, giving less weight to inflation risks highlighted by the Fed’s majority.
Asian international outlets
South China Morning Post, Yonhap News Agency — Emphasises that the Fed’s defiance of White House pressure underlines the bank’s independence and has knock-on effects for global markets, including interest-rate gaps with Asian economies. Reporting foregrounds U.S. political drama partly to underscore external risks to their own regions, which can accentuate perceptions of instability in U.S. governance.