The Federal Reserve’s policy committee is in wait-and-see mode. The U.S. economy has entered 2025 with plenty of momentum, a briefly shaky labor market appears to have stabilized, and recent months’ inflation readings have been stubbornly above the Fed’s 2% annual target.

Faced with a solid economy and mounting inflation concerns, the U.S. central bank has said it will “move cautiously” on cutting interest rates.

The Fed will likely pause its rate cuts this week. After that, uncertainty over Trump's tariff, immigration plans make forecasting rates a dice roll.

The Federal Reserve’s policy committee is in wait-and-see mode. The U.S. economy has entered 2025 with plenty of momentum, a briefly shaky labor market appears to have stabilized, and recent months’ i

Interest rates have been cut at the last three meetings in a row, after gradually increasing rates for three years.

Donald Trump’s return to the White House is overshadowing the Fed’s meeting this week, with policymakers expected to pause changes to interest rates for now.

Until then, Trump’s comments Thursday suggest he expects to regularly second-guess the Fed in public, despite a decades-long tradition among previous presidents of taking a hands-off approach to the central bank. Former president Joe Biden reappointed Powell, rather than replacing him, in a nod to central bank independence from politics.

The Fed is expected to hold off on another rate cut at its Jan. 29 meeting. Here's what it means for your finances.