FOMC holds federal funds rate steady in first meeting of 2026

The Federal Open Market Committee (FOMC) kept the federal funds rate steady at 3.5% to 3.75% in its first meeting of the new year.  

Following three previous rate cuts since September of 2025, Federal Reserve Chair Jerome Powell said that keeping the federal funds rate in this range should “help stabilize the labor market while allowing inflation to resume its downward trend toward 2%once the effects of tariff increases have passed through.” Assessing economic developments, Powell outlined that while economic activity is expanding and the job market may be stabilizing, inflation remains somewhat elevated and impacts from tariffs keep the future outlook uncertain. 

“The FOMC maintained the target fed funds rate at roughly 3.6 percent. The committee had cut rates at each of its prior three meetings, and two committee members dissented to the current decision, both preferring another rate cut,” said America’s Credit Unions Chief Economist Curt Long. “However, the committee sees the economy growing at a ‘solid pace,’ and it would likely take a sizable rise in unemployment to compel the majority of the committee to support another rate cut in the near future. Credit unions are addressing consumers’ most pressing economic concerns by offering the most affordable financial products and services in the marketplace.”