"The central bank's interest rate-setting committee is almost certain to keep its key short-term rate unchanged at about 3.6%, after three straight quarter-point cuts last year. Fed Chair Jerome Powell said after December's meeting that they were "well positioned to wait to see how the economy evolves" before making any further moves."
"This week's meeting - one of eight the Fed holds each year - will be overshadowed by the bombshell revelation earlier this month that the Justice Department has subpoenaed the Fed as part of a criminal investigation into testimony Powell gave last June about a $2.5 billion building renovation. It's the first time a sitting Fed chair has been investigated, and prompted an unusually public rebuke from Powell."
"Now, Powell will have to shift from a dispute with the White House to emphasizing that the Fed's decisions around interest rates are driven by economic concerns, not politics. Powell said Jan. 11 that the subpoenas were "pretexts" to punish the Fed for not cutting rates as sharply as Trump wants."
The Federal Reserve is expected to hold its key short-term rate at roughly 3.6% following three quarter-point cuts last year. Fed Chair Jerome Powell indicated the committee was "well positioned to wait to see how the economy evolves" before further moves. Changes in the short-term rate can influence mortgages, auto loans and business borrowing over time, though market forces also affect those rates. The meeting will be overshadowed by a Justice Department subpoena tied to Powell's testimony about a $2.5 billion building renovation, the first probe of a sitting Fed chair. Powell called the subpoenas "pretexts," and faces pressure to stress that rate decisions are driven by economics, not politics. Economists expect the Fed to continue assessing policy based on economic conditions despite intense scrutiny.
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