As it happened: Fed holds rates, Powell addresses media

NOTE: This is a live blog that will be updated frequently. Refresh often for the latest updates. Newest posts will appear at the top of the blog.

That’s a wrap on up our live coverage

3:20 p.m. ET

Thank you so much for joining us for our live coverage of the Federal Reserve rate decision. Before you go, there are a couple more stories posted today that you can check out.

Fergal McAlinden has chatted with a couple of brokers who say they don’t need rates to plummet to get the market rolling.

And Liezel Once has the latest on mortgage application data from the Mortgage Bankers Association.

Coming up tomorrow, we’ll have a couple more stories about the latest from the Fed, including our regular analysis from Melissa Cohn, regional vice president of William Raveis Mortgage

Powell’s advice for his successor

3:15 p.m. ET

While Powell largely avoided any questions about his future beyond May or who is eventual successor as Fed chair might be, he did offer some advice for the next chair.

“I would say a couple of things,” he said. “One is stay out of elected politics. Don't get pulled into elected politics. Don't do it. And another is our window into Democratic accountability is Congress. And it is not a passive burden for us to go to Congress and talk to people. It is an affirmative, regular obligation. You earn it with the elected overseers, so it is something you need to work hard at, and I have worked hard at it.”

He also suggested that the next person to sit in his seat will be surrounded by outstanding colleagues and staff to work with.

“The last thing is, it is easy to criticize government institutions in so many ways,” Powell said. “I will tell whoever it is, you are about to meet the most qualified group of people you not only have ever worked with, but you will ever work with. When you meet Fed staff, not everybody is perfect, but there isn't a better cadre of professionals more dedicated to the public well-being than those who work at the Fed.”

Powell: ‘Confident’ that Fed will maintain independence

3:02 p.m. ET

Powell was asked about the concept of central bank independence. He spoke broadly about what the concept means for all countries.

“The point of independence … to not have direct-elected financial control over the setting of monetary policy,” Powell said. “The reason is monetary policy can be used through an election cycle to affect the economy in a way that will be politically worthwhile. I am not talking about the US context. This is every advanced economy and democracy of any size.

“So, it is a good practice. I think if you lose that, first of all, it would be hard to restore the credibility of the institution. If people lose the faith that we are making decisions only on the basis of our assessment of what is best for everyone, for the wider public, rather than trying to benefit one group or another, it is going to be hard to retain it.”

He was asked point-blank if he was confident that the Fed could retain its independence.

“Yes, I am strongly committed to that, and so are my colleagues,” Powell said. “And we haven't lost it. I don't believe we will. I certainly hope we won't, but it is very important. The reason it is important is it has enabled central banks generally not to be perfect, but to serve the public well.”

Powell: A rate hike is ‘not anybody’s base case’

2:55 p.m. ET

While Powell would not commit to when the next cut might take place, many journalists at the press conference pressed Powell to outline a scenario in which the Fed might raise rates with its next move. Powell didn’t see that as a likelihood.

“It is not anybody's base case right now that the next move will be a rate hike,” he said. “Ultimately, we will do what we think is the right thing, but that is not where our people's expectations are right now.”

Powell tight-lipped about future cuts

2:47 p.m. ET

While media members asked a slew of questions for which Powell had no comment, he did discuss current market conditions and how they might impact future cuts.

One of the big changes is that the jobs market has stabilized a bit, which could lead to future rate holds. However, Powell wouldn’t tip his hand one way or another.

“Inflation performed about as expected, and as I mentioned, some of the labor market data came in suggesting evidence of stabilization,” Powell said. “It is overall a stronger forecast. After the three recent rate cuts, we are well-positioned to address the risks we face on both sides of our dual mandate, and will continue to make our decisions meeting by meeting, based on the incoming data and the implications and outlook of balances and risks.

“Haven't made any decisions about future meetings, but the economy is growing at a solid pace, the unemployment rate is broadly stable, and inflation remains somewhat elevated, so we will be looking to our goal variables and letting the data light the way for us.”

He said that the committee, including non-voters, was largely in favor of a rate hold on Wednesday.

“There was broad support on the committee for holding today, broad, I would say, including among non-voters,” Powell said. “Of course, some people did want to cut, and dissented, but the committee was pretty broadly for holding today. We still have some tension between employment and inflation, but it is less than it was. I think the upside risks to inflation and the downside risks are probably both diminished a bit.”

Powell: Cook case 'most important' case in Fed's history

2:39 p.m. ET

Powell was asked why he attended the Supreme Court hearing for Lisa Cook, whom the Trump administration is trying to fire for alleged mortgage fraud.

The Supreme Court seemed to favor Cook’s side of the case, as they expressed concern that Fed independence may be on the line.

“I would say that case is perhaps the most important legal case in the Fed's 113-year history,” Powell said. “As I thought about it, I thought it might be hard to explain why I didn't attend. In addition, Paul Volcker went to a Supreme Court case, famously in 1985 or so, so it is precedented. I thought it was an appropriate thing, and I did.”

Powell: ‘Housing sector has remained weak’

2:35 p.m. ET

Fed chair Jerome Powell said the economy has continued to expand, while unemployment has stabilized somewhat. He said those factors, combined with still elevated inflation, led the Fed to hold rates.

“The US economy expanded at a solid pace last year, and is coming into 2026 on a firm footing,” Powell said. “While job gains have remained low, the unemployment rate has shown some signs of stabilization. And inflation remains somewhat elevated. In support of our goal, today the Federal Open Market Committee decided to leave our Policy Rate unchanged.

“Having lowered our Policy Rate by 75 basis points over the course of our previous three meetings, we see is current stance of Monetary Policy as appropriate to promote progress toward both off maximum employment and 2% inflation goals.”

He said while consumer spending has picked up, the housing industry hasn’t seen the same boost.

“Activity in the Housing Sector has remained weak,” Powell said. “The temporary shutdown of the Federal Government likely weighed on economic activity last quarter, but these effects should be reversed as the opening boosts growth this quarter.”

Jerome Powell’s comments

2:30 p.m. ET

Here is the link to the YouTube video where Powell’s comments will air. We’ll transcribe his most notable comments here.

Broker reaction: Not surprised, but optimistic

2:15 p.m. ET

Reaction is coming in from across the mortgage industry, and most are not surprised by the Fed’s decision to hold rates today.

Samantha Shelton, mortgage broker and president of Align Lending, told me she expected the central bank to pause and see where things stand.

“Honestly, that’s not a surprise from where I sit as a mortgage broker,” Shelton said. “The Fed has been very clear that they want to see continued progress on inflation before making any meaningful moves, and right now this feels more like a ‘wait and confirm’ moment than a pivot point.”

Shelton said that even with the hold, rates can still move lower, as seen in early January.

“From a mortgage perspective, what’s important for consumers and the housing market to understand is that a Fed hold doesn’t mean mortgage rates are frozen,” she said. “Mortgage rates are driven much more by long-term bond markets and investor sentiment than by the Fed’s overnight rate. We’ve already seen that play out; markets tend to price in expectations well before the Fed actually acts.

“January is a great example of that. We saw some relief in rates earlier in the month, and it did drive activity. More conversations, more applications, more borrowers re-engaging, but affordability is still very sensitive. Even small rate movements matter when payments are already elevated, and buyers are far more payment-focused than rate-focused right now.”

Charles Goodwin, VP and head of bridge and DSCR lending with Kiavi, said that Powell’s comments after the hold may prove more interesting than the hold itself.

“Investors will be monitoring the press conference after for hints into future monetary policy,” Goodwin said. “Regarding mortgage rates, continue to pay attention to commentary that juxtaposes inflation and the labor market. The 10-year treasury, a common benchmark for mortgage rates, tends to react more strongly to changes in expectations for the labor market.

“Otherwise, watch for mentions of the Fed balance sheet policy. Any hint that they will slow the runoff of mortgage-backed securities (MBS) would be a win for mortgage spreads. Overall, though, markets will generally be looking past this meeting towards later in the year, when Jerome Powell's term as Fed chair is up."

Hunter Bolling, team lead and senior mortgage broker with Edge Home Finance and a member of the HB Mortgage Team, told our Fergal McAlinden that he was hopeful about the path for mortgage rates in 2026.

“I am optimistic,” Bolling said. “The everyday consumer, in our experience, is finally starting to see the light that rates might not fall to 4% again. I do believe now that the current administration has goals to achieve. Home affordability being one, and I hope they find ways to bring it to life.”

He said that consumers are paying attention to the Fed and the impact the central bank has on mortgage rates, even if it isn’t a direct impact.

“Clients actively ask about the Fed and rate cuts,” he said. “Most of the time, it has been with our past clients and what it means in terms of refinancing. We have used video via Loom to show them the MBS market and what rates can do. Visualization helps explain or debunk myths.” 

Jay Lessard, president and founder of Sonoran Lending, told McAlinden that he often has to explain that the Fed doesn’t directly control rates, but that its actions can influence rate movements.

“Clients often assume that Federal Reserve decisions directly determine mortgage rates,” Lessard said. “We explain that the relationship is more indirect, and that the mortgage market typically reacts in advance of Fed actions. Mortgage rates tend to follow the 10-year Treasury yield more closely.

“The Fed influences that market through rate hikes or cuts, its credibility in fighting inflation, and the signals it provides about future policy. As a result, there are times when the Fed lowers rates, yet mortgage rates rise because market expectations for the future have shifted.”

Coming up in a few minutes, we’ll hear from Fed chair Jerome Powell. Stay tuned!

How the Fed voted

2:10 p.m. ET

Here is the scorecard for how the Fed members voted. It is not a surprise to see Stephen Miran vote for a 25-basis-point cut. He is joined by Christopher Waller, who is one of the supposed finalists for Fed chair. Pundits wondered if he would go along with a rate cut to try to keep his name in the race for chair. We’ll see if this move was enough to keep him in the running.

Breaking: Fed announces rate decision

2:00 p.m. ET

The Federal Reserve has officially announced its rate decision. As expected, after three straight cuts, the Fed has announced it will keep rates steady.

The Fed announced it was keeping its funds rate steady, deciding against a fourth straight cut. The federal funds rate currently sits between 3.50% and 3.75%.

Stay tuned for broker reaction in the next 30 minutes, followed by comments from Fed chair Jerome Powell.

Here is the link to the YouTube video where Powell’s comments will air in 30 minutes.

North of the border

1:40 p.m. ET

North of the border, it was also rate decision day for the Bank of Canada. Our Fergal McAlinden reported today that the BOC voted to hold rates steady.

Canadian central bank governor Tiff Macklem said he was concerned about trade issues and geopolitical tensions with the United States.

He was also concerned about the future of the US Federal Reserve, saying he though Fed chair Jerome Powell had done a good job. He was hopeful that the US central bank would be able to maintain independence.

“The threat to independence of the central bank in the United States is one thing that has sort of been contributing to this sense of uncertainty,” Macklem said in a press conference today. “The US Federal Reserve is the biggest, most important central bank in the world. We all need it to work well. A loss of independence of the Fed would affect us all.

“For Canada, our financial markets are particularly integrated with the United States. So, it would particularly affect us. Keeping the Fed operating independently is good for Americans, and it’s good for Canadians.”

Filling the Fed chair

1:20 p.m. ET

In addition to today’s rate decision, another big Fed news story everyone is waiting on is President Donald Trump's announcement of the eventual successor to Fed chair Jerome Powell.

Many experts in Washington expected that announcement by now, but it hasn’t happened yet. Some outlets speculated that Trump might announce the chair pick on Fed decision day to pull some of the spotlight off of the expected rate hold, but no word on whether that will happen.

BlackRock senior executive Rick Rieder has surged in the betting markets in recent days as a potential pick. Other known frontrunners include current Fed governor Christopher Waller, former governor Kevin Warsh, and National Economic Council director Kevin Hassett, although Trump insists he prefers to leave Hassett where he is.

One opening on the Fed board is coming this week, as Stephen Miran’s term ends on January 31. However, Miran will remain on the board until a successor is “appointed and have qualified.”

Preview of today’s decision

1:00 p.m. ET

Before the central bank announces its next rate decision in one hour, we’ll take you through some of our previews you might have missed on MPA.

I spoke with Sam Williamson, senior economist with First American, who said that while the central bank is likely to hold in January, future cuts would be predicated on the health of the jobs market.

While the employment picture will figure into the Fed’s future plans, inflation and the overall health of the economy will also be at the forefront of its mind. Our Liezel Once wrote about a bump in inflation lowered the chance of a Fed cut. She also wrote that the economy keeps chugging along as the latest GDP report was strong.

Welcome to our live blog!

12:45 p.m. ET

Welcome to our first live blog of 2026 at Mortgage Professional America. Today, we will cover the Federal Reserve’s first rate announcement of the new year.

The central bank finished 2025 with three straight 25-basis-point rate cuts, bringing the Fed funds rate to between 3.50% and 3.75%.

Now, the Fed is expected to pause its rate-easing to allow the effects of those rate cuts to be analyzed. They have struggled to fully grasp the impact of the cuts because the official government data they get on the jobs market and inflation has been delayed or canceled by the last government shutdown.

While economists hope data will catch up soon, another government shutdown looms this weekend.

Over the next couple of hours, we’ll preview the upcoming rate decision, bring you the decision at 2 p.m. ET, and then hear from brokers and Fed chair Jerome Powell afterward.

Powell’s comments should shed light on the next two meetings, which will be the final two rate decisions with Powell as Fed chair.

Be sure to refresh often and stay with us all afternoon for all the breaking news from the Federal Reserve!