The Federal Reserve (Fed) faces its first meeting of the year, which is held on January 27 and 28with an apparently calm monetary scenario, but loaded with noise at the political and institutional level. After cutting interest rates in the three last meetingsthe consensus of the market and the main analysis houses expects that the Federal Open Market Committee (FOMC) choose now to keep the price of money in the range of 3.5%-3.75%.
From Oxford Economics They point out that, after the accumulated cuts, rates are now close to the neutral level, while the downside risks on the labor market have moderated and inflation has peaked. After lowering rates in each of the last three meetings, they expect the FOMC to make a long pausethey explain, emphasizing that The balance between inflation and employment risks remains largely unchanged.
The macro diagnosis supports this caution. The latest employment report showed a slight drop in the unemployment rate and a stabilization of private employment growth, although at low levels, while other indicators, such as the employment ratio of the core-age population, continue to point to a solid labor market. In parallel, both headline and core inflation appear to have peakedsupported by the disinflationary effect of housing and the gradual moderation of labor costs.
PAUSE IN JANUARY AND CUTS LATER
Against this backdrop, Oxford Economics maintains as its central stage two rate cuts in 2026, in June and Septemberwith a terminal level close to 3%. In their opinion, a decisive deterioration in the labor market would be necessary for the Fed to cut earlier and more aggressively, something they consider unlikely.
The January meeting of the Federal Reserve will be almost secondary to the institutional debate
Other firms share a similar vision. From TD Securities They anticipate that the Fed will keep rates unchanged this week and that Jerome Powell will be cautious in his speech. «We expect Powell to adopt a non-committal tone regarding short-term cuts, although remember that the Committee’s central forecast continues to point to an easing of monetary policy this year,» they note. For TD, the Short-term risk is that the Fed remains on pause for longerkeeping rates high, although without large additional increases in the long sections of the curve. Santalucía Asset Management also rules out movements at this meeting. According to Luis Merino, head of Fixed Income, Mixed Funds and Funds of Funds, «the meeting is held in a context of extreme politicization and judicialization»with increasing pressure from the White House to force a more expansive monetary policy.
INFLATION STILL ABOVE TARGET
The Recent data reinforces the idea of pause. The personal consumption price index (PCE), the Fed’s preferred benchmark, stood at 2.8% year-on-year in Novemberstill far from the 2% target. Added to this is the strength of economic growth in the second half of 2025 and the stability of the labor market, as noted above. All these factors, according to analysts, make an immediate cut «very unlikely.» In this sense, Link Gestión reminds us that «inflation has not decreased» in the United States and employment remains resilient, which complicates a more accommodative turn in the short term.
FOMC ROTATION AND HARDER BIAS
Beyond the immediate decision, analysts look closely at the annual rotation of voting members of the FOMC. According to Oxford Economics, the entry of new regional presidents in 2026 tilts the Committee slightly towards a more restrictive bias. Some of them have publicly defended maintaining the focus on inflation, even if the labor market shows signs of cooling. «Accommodative financial conditions and resilient consumption reinforce the argument for remaining on pause,» they point out from Oxford, highlighting that uncertainty about the neutral level of rates forces the Fed to act in a particularly prudent and data-dependent manner.
THE BIG FOCUS: THE INDEPENDENCE OF THE FED
However, the main focus of attention will not be so much on the decision of rates as on the risk to the independence of the central bank. Oxford Economics warns that legal proceedings affecting members of the Council and political pressure on Powell introduce an uncertainty factor for the future of monetary policy, although its base scenario is that these attempts do not prosper.
The Fed is caught between data that does not justify immediate new cuts and growing political pressure
From Santalucía AM they warn that «the loss of independence of the Federal Reserve would exert a deterioration in the control of inflation, potentially incorporating a risk premium on the interest rate curves», which justifies, in its case, a strategy of caution in the US public debt. Independent analyst Michael Hewson goes one step further and considers that The January meeting will be almost secondary to the institutional debate. In his opinion, «the barrier to a new cut is too high» and President Donald Trump’s belligerent attitude towards Powell is having a counterproductive effect. «By being so aggressive with Powell, he is making it more difficult for the Fed to even consider lowering rates for fear of appearing to give in to political influence,» he says. With this panorama, the January meeting is emerging as a waiting point: unchanged rates, cautious message and a Fed caught between data that does not justify immediate new cuts and growing political pressure that threatens to condition its credibility in the medium term.
