Federal Reserve set to pause rate cuts as Powell faces inflation, political pressure

The Federal Reserve is widely expected to hold interest rates steady at 3.5%-3.75% when it concludes its two-day policy meeting Wednesday, pausing after three consecutive cuts in late 2025 while Chair Jerome Powell navigates persistent inflation, resilient labor markets, and public pressure from former President Donald Trump for faster easing.

Powell’s 2:00 p.m. ET press conference will be closely watched for signals on the timing of future rate cuts, with both traditional and crypto markets seeking clarity on whether the central bank sees room to move soon or prefers an extended wait-and-see approach.

Jerome Powell speech timing and where to watch

The Federal Open Market Committee (FOMC) is set to release its policy statement at 2:00 p.m. ET on January 28, immediately followed by the Jerome Powell speech and press conference. The event will be streamed live on the Federal Reserve’s official website and its YouTube channel, offering real-time access for investors worldwide.

For viewers outside the United States, timing reflects the absence of U.S. Daylight Saving Time. In India, the rate decision will be released at 12:30 a.m. IST, with the Jerome Powell speech beginning at approximately 1:00 a.m. IST on Thursday.

Analysts say accessibility matters this time, as markets are less focused on the rate decision itself and more on Powell’s tone, phrasing, and forward guidance.

This is the Fed’s first scheduled meeting of 2026 and follows three consecutive 25-basis-point cuts late last year. With markets already pricing in additional easing later in the year, tonight’s Jerome Powell speech is expected to clarify whether the central bank sees room to move soon—or prefers to wait.

Policy outlook after cuts: what the Jerome Powell speech may signal

Despite public pressure from former President Donald Trump for faster rate reductions, the Federal Reserve is widely expected to pause. Akshat Garg, Head of Research and Product at Choice Wealth, said the signs point clearly in that direction.

“All signs point to the central bank hitting the pause button at this week’s meeting, likely holding rates steady in the 3.50%–3.75% range,” — Akshat Garg, Head of Research & Product, Choice Wealth.

Garg described the moment as a strategic pause rather than a shift in direction, noting that after aggressive easing in late 2025, policymakers want time to assess how those cuts filter through the economy.

According to analysts, the Jerome Powell speech is likely to reinforce a “wait-and-see” approach, emphasizing data dependency over market expectations.

Powell has repeatedly stressed that policy decisions will be driven by inflation trends, labor market resilience, and financial conditions. Observers expect tonight’s Jerome Powell speech to reiterate that message, pushing back against assumptions that cuts will arrive quickly simply because inflation has cooled from its peak.

Macro backdrop shaping the Jerome Powell speech

The broader economic context provides the backdrop for the Jerome Powell speech. Inflation has moderated compared to prior years but remains above the Federal Reserve’s 2% target. At the same time, consumer spending has held up, labor markets remain relatively tight, and financial conditions have loosened slightly as markets anticipate future easing.

Seema Srivastava, Senior Research Analyst at SMC Global Securities, said a pause aligns with the Fed’s cautious framework.

“A pause would align with the Fed’s data-dependent approach,” Seema Srivastava, Senior Research Analyst, SMC Global Securities.

She added that holding rates steady helps temper “overly aggressive market bets on near-term cuts” while reaffirming the Fed’s commitment to policy decisions guided by evidence rather than sentiment or political pressure.

This balance is central to the Jerome Powell speech, as markets look for reassurance that the Fed remains in control of inflation risks without unnecessarily tightening financial conditions.

Crypto markets watch Jerome Powell speech for cues

While traditional markets digest the Fed’s stance, digital asset traders are also focused on the Jerome Powell speech. Bitcoin, Ethereum, and Solana have remained rangebound ahead of the meeting, reflecting caution rather than conviction.

Bitcoin is hovering near $89,100, trading within a narrow band between roughly $88,900 and $89,500 over the past 24 hours, with volumes exceeding $34 billion. Ethereum is trading around $3,008, up about 2.5% on the day, while Solana is near $126.9, gaining roughly 2.4% over the same period.

Analysts say the lack of volatility reflects a market waiting for confirmation rather than speculation. A dovish tilt in the Jerome Powell speech could support risk assets, while a firmer tone on inflation risks may keep crypto prices capped in the near term.

For both macro and crypto traders, the key takeaway is not the rate decision itself but how Powell frames the path ahead. As one market strategist put it, tonight’s message is about watching the tone, not just the dots.

With inflation still above target, labor markets resilient, and financial conditions easing, the Jerome Powell speech is expected to underscore patience. Whether that patience reassures markets or frustrates them will shape sentiment well beyond this meeting.