Overview
- Futures pricing shows a roughly 95%–99% probability the Fed leaves the target rate at 3.50%–3.75% on Jan. 28 after three quarter-point cuts in late 2025.
- Traders say the press conference matters most, with Powell’s tone determining whether the pause reads as dovish or hawkish for stocks, bonds, the dollar and bitcoin.
- The meeting unfolds under unusual political pressure, including a DOJ subpoena and threatened criminal probe of Powell, an effort to remove Governor Lisa Cook and an impending nomination to replace Powell in May.
- Trump-appointed Governor Stephen Miran is expected to dissent in favor of a 50-basis-point cut, while most analysts anticipate only one or two reductions later in 2026 and JPMorgan projects none.
- Bond investors are extending duration and selectively adding credit, while reports of New York Fed rate checks tied to possible dollar‑yen intervention and questions over Trump’s $200 billion mortgage-bond plan add cross‑market uncertainty.