US Fed Meeting 2026 Highlights: Fed pauses rates, as expected; Indian stock markets crash, rupee at record low

US Fed Meeting LIVE: Policy Decision

• The FOMC voted by a 10:2 majority to keep the federal funds rate unchanged at 3.50%–3.75%.
• The Committee views the current policy stance as appropriate to balance growth and inflation objectives.

Inflation & Expectations

• US inflation remains above the 2% target, driven by higher goods prices due to tariffs.
• Disinflation in services continues, and long-term inflation expectations remain anchored around 2.0%.

Labour Market & Growth

• Labour market conditions are showing signs of stabilisation, though payroll growth remains weak.
• Unemployment has seen a marginal decline recently, but softer labour demand persists.
• Economic growth remains resilient, supported by consumption and business investment, while the housing sector shows signs of stress.

Market Impact & Outlook

• Equity indices and bond yields closed flat post the decision, while the dollar remained under pressure.
• As per the Fed’s projections, only a 25 bps rate cut is expected in 2026, subject to incoming data.

US Fed Meeting LIVE: Naval Kagalwala, COO and Head of Product at Shriram Wealth Ltd, said the US Federal Reserve’s decision to keep policy rates unchanged at 3.5 %–3.75 % was widely expected after three cuts last year. He noted that “the pause reflects a steadily growing economy, healthy consumer spending and a stabilising job market.”

Kagalwala added that the Fed’s commentary remained upbeat, with expectations that tariff-driven inflation pressures may peak by mid-2026. Longer-tenor US Treasury yields edged slightly higher as hopes of further rate cuts faded. In India, bond market participants remain focused on the upcoming Union Budget, particularly fiscal deficit targets and FY27 borrowing plans, even as 10-year G-Sec yields have risen about 13 bps over the past month.

US Fed Meeting LIVE: Apurva Sheth, Head of Market Perspectives and Research at SAMCO Securities, said the US Federal Reserve’s decision to keep rates unchanged was followed by sharp moves in bond and commodity markets. US 10-year bond yields initially jumped to 4.897 % before cooling off, but Sheth noted that the bigger signal came from precious metals. He said, “The rally, especially in gold, indicates growing concerns around the Fed’s independence and counterparty risk.”

Sheth highlighted that the S&P 500–to–gold ratio has fallen 20 % this month, hitting its lowest level since October 2013. According to him, this trend suggests eroding trust in financial assets, with investors increasingly favouring hard assets like commodities over bonds and equities.

US Fed Meeting LIVE: Rajesh Palviya, Head of Research at Axis Securities, said the US Federal Reserve’s decision to hold the federal funds rate at 3.5 %–3.75 % signals confidence in economic stability after three rate cuts in late 2025.

Quoting Fed Chair Jerome Powell, Palviya highlighted that “the US economy is entering 2026 on a strong footing, with steady growth and improving labour market conditions.” He noted that globally, equities may face mild pressure as expectations of near-term rate cuts fade, while the US dollar could remain firm. In India, benchmarks such as the Nifty and Sensex may consolidate amid cautious foreign flows, though strong domestic earnings are expected to limit any sharp downside.

US Fed Meeting LIVE: "The Fed’s current stance reflects a wait-and-watch approach amid elevated uncertainty. Labour market conditions show early signs of stabilisation, even as job creation remains modest. Economic growth continues to be resilient, supported by strong consumer spending and business investment, although stress persists in the housing sector. A potential dovish tilt in the coming months could reinforce the relative attractiveness of emerging markets over the US," said the brokerage.

US Fed Meeting LIVE: The Indian rupee slipped to a fresh all-time low on Thursday, weighed down by persistent foreign fund outflows and increased demand for hedging against further depreciation, despite strong domestic economic data. The currency weakened to ₹91.9850 against the dollar, breaking its previous record low of ₹91.9650 touched last week.

Meanwhile, The US Federal Reserve, led by chair Jerome Powell, announced the outcome of its two-day meeting on Wednesday, 28 January 2026, during which the central bank kept the interest rate steady in the range of 3.5% to 3.75%.

So far this year, the rupee has fallen about 2% and is down nearly 5% since US President Donald Trump announced steep tariffs on Indian merchandise exports. This comes even as India’s GDP expanded 8.2% in the quarter ended September 30, as per official data.

Traders said the Reserve Bank of India likely stepped in before the spot market opened, aiming to curb volatility as the rupee neared the key ₹92 level.

US Fed Meeting LIVE: Indian stock market benchmarks retreated on Thursday, slipping about half a percent as investors turned cautious after two consecutive sessions of gains and ahead of the Union Budget scheduled for Sunday.

The recent rally, which saw the Nifty 50 and the Sensex rise by around 1% over the past two sessions, was driven by positive sentiment surrounding the India–European Union free trade agreement and the US Federal Reserve’s decision to hold interest rates steady, in line with market expectations.

During Thursday’s session, the Sensex dropped 0.5 percent to an intraday low of ₹81,969.39, while the Nifty 50 declined 0.4 percent to 25,248.55.

US Fed Meeting LIVE: Ross Maxwell of VT Markets said growing uncertainty around US growth, trade policy and fiscal sustainability is likely to keep markets on edge. Powell’s warning that the US budget deficit is unsustainable underscores longer-term fiscal risks, which tend to pressure the US dollar and lift volatility expectations.

In such an environment, Maxwell said gold and silver stand to benefit, as a softer or range-bound dollar supports precious metals and safe-haven demand rises. Heightened uncertainty can also loosen financial conditions outside the US, supporting emerging market assets and commodities. While equities may continue to grind higher, he cautioned that cross-asset volatility is likely to remain elevated as markets adjust to a Federal Reserve increasingly sensitive to downside risks.

US Fed Meeting LIVE: Commenting on the January US Federal Reserve meeting, Ross Maxwell, Global Strategy Operations Lead at VT Markets, said the decision to keep rates unchanged was widely expected, with Fed Chair Jerome Powell striking a balanced yet cautious tone. He noted that the US labour market is becoming more stable, though job growth is slowing as labour force participation declines and demand softens, partly due to the near-term impact of artificial intelligence.

Maxwell highlighted that inflation remains above the Fed’s target but broadly in line with expectations. At the same time, stronger incoming data point to a healthier growth outlook, giving the central bank confidence to remain patient. Powell reiterated that policy will stay firmly data-driven and stressed that rate hikes are not the base case, while future cuts could be considered if labour market risks resurface or tariff-driven price pressures ease.

US Fed Meeting LIVE: The US dollar strengthened on Wednesday after Treasury Secretary Scott Bessent reaffirmed support for a strong currency, easing bets that Washington would step in to bolster the Japanese yen. The yen slipped to around 153 per dollar. The 10-year US Treasury yield was largely unchanged at 4.24 percent.

Markets reflected steady risk appetite as investors weighed supportive monetary conditions against solid earnings and lingering geopolitical risks. The Federal Open Market Committee voted 10–2 to keep the policy rate at 3.5 percent–3.75 percent, with Governors Christopher Waller and Stephen Miran backing a 25-basis-point cut.

In currency markets, the euro hovered near $1.1955, the yen around 153.40 per dollar, the offshore yuan at 6.9435, and the Australian dollar at $0.7036.

Indian equity benchmarks were set for a muted start on Thursday after logging gains over the previous two sessions, driven by optimism around the India–European Union trade agreement and the U.S. Federal Reserve’s decision to keep interest rates unchanged, in line with expectations.

With the immediate global cues largely priced in, investor focus is now turning to the Union Budget for FY2026–27, scheduled to be presented on February 1. Early indicators pointed to a steady opening, with Gift Nifty futures trading at 25,373.5 around 7:58 am IST, suggesting levels close to Wednesday’s Nifty 50 close of 25,342.75.

Both the Nifty 50 and the Sensex have gained about 1 percent over the past two sessions. The rally was supported by improved risk sentiment following the announcement of the India–EU free trade agreement earlier this week, under which the European Union will eliminate tariffs on 90% of Indian exports.

US Fed Meeting LIVE: Outgoing US Federal Reserve chair Jerome Powell on Wednesday (local time) shared some advice for his to-be appointed successor after announcing the central bank's decision to keep rates unchanged. In his speech, Powell, whose term ends on 15 May this year, laid out three specific pieces of advice for the next chair of the US Federal Reserve. Read here

US Fed Meeting LIVE: Gold prices extended its record-breaking rally, edging closer to the $5,600-per-ounce level after the US Fed policy. Spot gold price rose 2.1% to $5,511.79 an ounce, after hitting a record $5,591.61 earlier in the day. Spot silver price gained 1.3% to $118.061 an ounce after hitting a record high of $119.34 earlier.

US Fed Meeting LIVE: Asian markets traded mixed on Thursday after the US Federal Reserve policy. Japan’s Nikkei 225 gained 0.18%, while the Topix fell 0.57%. South Korea’s Kospi jumped 1.09%, and the Kosdaq rallied 2.69%. Hong Kong Hang Seng index futures indicated a lower opening.

US Fed Meeting LIVE: US stock market ended mostly higher on Wednesday after the Federal Reserve kept interest rates unchanged as expected.

The Dow Jones Industrial Average rose 12.19 points, or 0.02%, to 49,015.60, while the S&P 500 eased 0.57 points, or 0.01%, to 6,978.03, and the Nasdaq Composite gained 40.35 points, or 0.17%, to 23,857.45.

"We haven't lost it," Powell said of Fed independence. "I don't believe we will. I certainly hope we won't."

“Geopolitical risk for us is a lot of it is around energy, oil. And so far, with all the turmoil, oil prices have come down, as you know, and so we don't really see much,” Powell said.

“You hear large companies, though, saying that they either won't be hiring for some time, or that they're hiring less, or they're throwing people off, and they tend to refer to AI when they do that. So we're all watching and learning, and it could certainly have pretty significant effects on the economy, the workforce in our society,” Powell said.

The US dollar held gains against the euro and yen on Wednesday after the Federal Reserve maintained steady interest rates, citing persistent inflation and strong economic growth.

“Most of the overrun in goods prices is from tariffs. And that's actually good, because if it weren't from tariffs, it might mean it's from demand, and you know, that's a harder problem to solve. We do think tariffs are likely to move through and be a one-time price, so most of the overshoot, if if you were to take that out, you'd get and you would, I mean inflation, core PCE, inflation is running just a bit above 2% x the effects of tariffs on goods,” Powell said.

Not made a decision on future rate cuts, Powell says.

“Fed has been assigned two goals for monetary policy, maximum employment and stable prices. We remain committed to supporting maximum employment, bringing inflation sustainably to our 2% goal and keeping longer term inflation expectations well anchored,” Powell said.

“A good part of the slowing in the pace of job growth over the past year reflects a decline in the growth of the labour force due to lower immigration and labour force participation, though labour demand has clearly softened, as well as other indicators, including openings, layoffs, hiring and nominal wage growth show little change in recent months,” Powell said.

“Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people,” Powell.

“The temporary shutdown of the federal government likely weighed on economic activity last quarter,” Powell said.

“Available indicators suggest that economic activity has been expanding at a solid pace. Consumer spending has been resilient, and business fixed investment has continued to expand. In contrast, activity in the housing sector has remained weak,” Powell said.

Federal Reserve Chair Jerome Powell's address has begun.

Federal Reserve Chair Jerome Powell's address will begin soon.

Powell’s press conference will be live-streamed on the U.S. Federal Reserve’s website: https://www.federalreserve.gov/.

The speech will also be broadcast live on the Federal Reserve’s official YouTube channel on Wednesday — https://www.youtube.com/federalreserve.

Steady interest rates were favoured by Jerome Powell, John Williams, Michael Barr, Michelle Bowman, Lisa Cook, Beth Hammack, Philip Jefferson, Neel Kashkari, Lorie Logan and Anna Paulson.

Stephen Miran and Christopher Waller voted to lower the target range for the federal funds rate by 1/4 percentage point at this meeting.

The Federal Reserve plans to carefully assess incoming data, the evolving outlook, and the balance of risks.

“Available indicators suggest that economic activity has been expanding at a solid pace. Job gains have remained low, and the unemployment rate has shown some signs of stabilization. Inflation remains somewhat elevated,” FOMC said.

The US Federal Reserve has announced no change to its benchmark interest rate, which is currently in the range of 3.50-3.75%.

People around the world are awaiting the US Federal Reserve FOMC's two-day policy meeting outcome, which will determine the key interest rates for the US economy.

In the last FOMC meeting, it was decided to cut its key benchmark interest rates by 25 basis points.

Jerome Powell’s press conference will live stream on the U.S. Federal Reserve’s website: https://www.federalreserve.gov/.

The speech will also be broadcast live on the Federal Reserve’s official YouTube channel on Wednesday — https://www.youtube.com/federalreserve.

People are awaiting the US Federal Reserve's first policy decision of the year, which the central bank will announce at 12:30 a.m. (IST), which will be one hour later than usual due to the Daylight Saving Time (DST) in the United States.

In the US, people will be able to see the Fed's policy outcome at 2:00 p.m. (EDT), as per the official data.

Although the US Federal Reserve cut its key interest rate by 25 basis points on 10 December 2025, for the third time in 2025, the 3.50% to 3.75% interest rate came on the backdrop of elevated inflation in the US economy and slowing job growth in the country.

“Job gains have slowed this year, and the unemployment rate has edged up through September. More recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated,” said the FOMC on 10 December 2025.

At the December FOMC meeting, Federal Reserve Chair Jerome Powell said that the current overshooting of the central bank's 2% inflation target is mostly due to President Donald Trump's import tax hikes.

"It's really tariffs that are causing most of the inflation overshoot," Powell said after the last Fed meeting.

According to December 2025 data, the unemployment rate in the United States stands at 4.4%.

As of November 2025, the inflation rate in the United States stands at 2.8%, higher than the Fed's target range of 2%.

Since the Federal Reserve has a dual mandate to promote maximum employment and stable prices for the American people, policymakers keep a close watch on the unemployment rate. This helps them determine whether the US economy is near or at maximum employment and guides decisions on the appropriate interest rates to support employment while ensuring price stability.

The Federal Reserve seeks to achieve inflation of 2% over the longer run, as measured by the annual change in the price index for personal consumption expenditures (PCE).

Federal Reserve policymakers keep a close eye on inflation rates and modify monetary policies to aim for their target, all while supporting the objective of maximum employment. The central bank has the a dual mandate to promote maximum employment and stable prices for the Americans.

Any change to the key interest rates impacts short-term interest rates across various financial assets. These changes influence the spending choices of households and businesses, thereby affecting overall economic activity, employment levels, and inflation rates.

The Federal Open Market Committee (FOMC) sets a target range for the key in. The FOMC has eight regularly scheduled meetings each year and announces its policy decisions at 2 pm (ET) on the second day of each meeting.

US Federal Reserve Governor Stephen Miran on Tuesday said he sees the need for a substantial rate cut in 2026, advocating a larger decrease than the central bank has so far indicated, according to AFP.

Financial markets generally expect the Fed to maintain interest rates at current levels until its June meeting, according to CME FedWatch.

Economists anticipate policymakers will keep rates steady as they evaluate the impact of the three consecutive rate cuts that reduced the benchmark lending rate to a range of 3.50% to 3.75%, AFP reported.

The euro fell against the dollar on Wednesday as traders awaited the US Federal Reserve's latest interest rate decision, AFP reported.

The FOMC meeting is scheduled for January 27–28. The policy statement will be released at 2 pm ET on January 28, followed by a press conference with Powell.

Jerome Powell’s press conference address will live stream on the US Federal Reserve’s website: https://www.federalreserve.gov/.

His speech will also be broadcast live on the Federal Reserve’s official YouTube channel - https://www.youtube.com/federalreserve.