Overview
- Traders and officials largely expect no change to the 3.50%–3.75% policy range at the Jan. 27–28 meeting, with futures implying about a 5% chance of a cut after the Beige Book showed activity up in most districts and hiring mostly unchanged.
- San Francisco’s Mary Daly and Philadelphia’s Anna Paulson signaled comfort with holding steady, and Vice Chair Philip Jefferson said the current stance is in the neutral range and well positioned to adjust based on incoming data.
- Vice Chair for Supervision Michelle Bowman warned the job market shows signs of fragility and said the Fed should be ready to cut again and avoid signaling a pause, arguing underlying inflation is near target once tariff effects fade.
- ECB chief economist Philip Lane said there is no near‑term rate debate given inflation near 2%, though he cautioned that a Fed policy departure or shifts in U.S. financial conditions could create euro‑area risks.
- In Japan, Reuters sources said some BOJ policymakers see scope for an April hike due to yen‑driven inflation risks, even as a Reuters poll shows economists broadly expect no move through March and foresee rates reaching 1% or higher by September.