Fed Holds Rates at First FOMC of the Year... Pro-Trump Members Oppose Decision (Update)

Reuters Yonhap News

The US Federal Reserve (Fed) has kept its benchmark interest rate unchanged at its first Federal Open Market Committee (FOMC) meeting of the year. This has put a halt to the rate-cutting cycle that had occurred three times last year.

On January 28 (local time), the Fed held the FOMC and decided to maintain the US benchmark interest rate at its current level of 3.5-3.75%. This decision to hold the rate comes after three consecutive rate cuts since September last year. As a result of the Fed’s decision, the interest rate gap between South Korea (2.50%) and the US remains at 1.25 percentage points.

The market had already anticipated the Fed’s decision to keep rates unchanged. At the December FOMC meeting last year, Fed Chair Jerome Powell had suggested a hold, stating that the benchmark rate was "within the range estimated to be neutral." However, among the Fed committee members, 10 voted in favor of the hold, while Fed Governors Stephen Miran and Christopher Waller, both known for their pro-Trump stance, opposed the decision and argued for a rate cut.

In its statement, the Fed said, "Job growth remains subdued, and the unemployment rate is showing some signs of stabilizing," adding, "Inflation is still somewhat elevated." The statement continued, "We are prepared to adjust our monetary policy stance as appropriate should risks emerge that threaten the achievement of our goals of maximum employment and price stability."