US Federal Reserve keeps key interest rate unchanged in first decision of 2026

Dubai: The US Federal Reserve held rates steady on Wednesday, a decision that went against President Donald Trump’s repeated calls for deeper cuts. Policymakers said they still see room to lower rates later if conditions change.

The Central Bank of the UAE (CBUAE) too decided Wednesday to keep key interest rate unchanged at 3.65%, mirroring the Fed decision. The Fed's 10-2 vote was an outcome that was widely expected as officials await more data on the world's biggest economy.

In a statement on its decision, policymakers flagged that economic activity has been "expanding at a solid pace," while the unemployment rate showed some "signs of stabilization."

But the Federal Open Market Committee saw two dissents. The Federal Open Market Committee recorded two dissents. Fed Governor Stephen Miran and Christopher Waller, who is widely seen as a potential successor to Chair Jerome Powell, supported a quarter-point cut.

Three cuts

The central bank has cut rates at its past three meetings, bringing them into a 3.50 percent to 3.75 percent range, as policymakers reacted to signs of cooling in the US jobs market.

Now, firm US GDP growth, still-low unemployment, and persistent inflation have pushed officials into a wait-and-see stance. That slower pace risks reopening tensions with Trump, who has repeatedly pressed for aggressive rate cuts.

Trump has sharply escalated pressure on the Fed since returning to the White House a year ago, taking steps that officials warn could threaten the bank's independence from politics.

The president has been seeking to oust Fed Governor Lisa Cook over mortgage fraud allegations, while his administration launched an investigation into Powell over the bank's headquarters renovation.