The Federal Reserve’s Federal Open Market Committee (FOMC) decided to keep the federal funds rate target range at 3-1/2 to 3-3/4 percent, deferring policy cuts to assess economic conditions further. Vice Chair Michelle Bowman emphasized that while inflation is nearing the 2 percent target, labor market fragility poses greater risks. She noted slowing payroll growth, a drop in the job availability index, and potential for renewed labor market deterioration. Inflation progress is attributed to fading tariff effects, though core PCE inflation remains above target. Bowman cautioned against overreacting to recent data due to statistical noise from the government shutdown, advocating patience in policy adjustments. The Fed will continue monitoring labor market stability and inflation trends, with upcoming data releases shaping the path of monetary policy.
https://www.federalreserve.gov/newsevents/speech/bowman20260130a.htm
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