The Federal Reserve is expected to keep its key interest rate at the target range of 3.5% to 3.75%, but traders are looking for hints on next steps for policy.

The Federal Reserve concluded its first meeting of 2026 by holding the federal funds rate (FFR) steady in the 3.50%-3.75% range.

By Howard Schneider WASHINGTON, Jan 28 (Reuters) - The U.S. Federal Reserve held interest rates steady on Wednesday, citing still-elevated inflation alongside solid economic growth, and giving little indication in its latest policy statement of when borrowing costs might fall again.

Traders in the federal-funds-futures market continued to price in two potential interest-rate cuts by the Federal Reserve this year as they assessed the Fed’s statement Wednesday on its decision to hold its policy rate steady at the current target range of 3.

Forecasters don't believe the next Fed chair installed by President Donald Trump will drive down overnight rates toward the low levels demanded by the president.

The rate-setting committee remains split between those opposed to further cuts until inflation comes down, and those who want to lower rates to further support hiring.

President Donald Trump says he will announce his pick for the next chair of the Federal Reserve next week, setting the stage for a high-stakes confrontation at the heart of the U.S economy. The announcement comes as Trump ramps up attacks on current Fed Chair Jerome Powell for refusing to slash interest rates as aggressively as the president demands.