Fed holds interest rates steady for first time since July

The U.S. Federal Reserve has decided to keep interest rates unchanged at 3.5%–3.75% in its first policy meeting of 2026. After cutting rates three times last year, the Fed is hitting pause to see how the economy behaves.

The decision wasn’t unanimous, two officials wanted a rate cut, showing there’s still debate inside the Fed. They will keep watching inflation and jobs closely before making the next move.

This cautious approach comes as inflation is still above the Fed’s target and the labor market shows mixed signals. The outcome was largely in line with market expectations.