Federal Reserve Keeps Interest Rates Unchanged at 3.5%

TLDR

• Federal Reserve maintains rates at 3.5% to 3.75%.
• Inflation rate stands at 2.7% as of December 2025.
• Dissent among FOMC members for a potential rate cut.

The Federal Reserve has decided to keep its benchmark federal funds rate unchanged. This decision, made during the Federal Open Market Committee (FOMC) meeting on January 28, 2026, aligns with market expectations. The current rate remains at 3.5% to 3.75% after three consecutive rate cuts in 2025.

This move reflects the Fed’s assessment of the U.S. economy. Key indicators include a strong pace of economic activity, low unemployment, and inflation at a rate of 2.7% as of December 2025. Federal Reserve Chair Jerome Powell, among others, voted to maintain the current rates. Full details of the meeting can be found in the official FOMC statement.

Dissent within the Committee

Not all members of the FOMC agreed with holding the rates steady. Christopher Waller and Stephen Miran expressed a preference for a 0.25% rate cut. Despite their dissent, the majority agreed to maintain the current rate. The FOMC’s decision-making process involves weighing various economic indicators and forecasts to ensure stability.

Federal Reserve Governor Lisa Cook also participated in the meeting. Cook’s position is currently under review by the Supreme Court amid administration-related pressures. This ongoing case highlights the complexities of governance and regulatory oversight within the Federal Reserve system.

Impact on Cryptocurrencies

The Fed’s decision may have implications for cryptocurrency markets. Historically, pauses in rate changes have coincided with periods of stabilization in digital assets like Bitcoin (BTC) and Ethereum (ETH). These assets, along with altcoins in decentralized finance (DeFi) ecosystems, might face slight pressure due to the sustained rate environment.

Previous market responses to rate pauses included a notable drop in Bitcoin’s value in the fourth quarter of 2023. However, crypto markets also showed resilience, with recoveries following initial downturns. Investors in crypto assets will likely watch for similar trends and adjust strategies accordingly.

Broader Economic Context

The Fed’s decision is part of wider economic considerations. Recent events include a Department of Justice probe into Chair Powell. Powell views this investigation as a threat to the independence of the Federal Reserve. Additionally, no new information from other regulatory bodies like the SEC, CFTC, or ESMA has been reported in this context.

This rate policy decision continues the Federal Reserve’s strategy following earlier rate hikes. The institution’s actions are closely monitored by markets, impacting both traditional and digital assets. As the macroeconomic landscape evolves, stakeholders will continue to analyze the Fed’s approach to monetary policy.