The Federal Reserve held rates steady at 3.5-3.75% on January 28, 2026, in a 10-2 vote. Governors Stephen Miran and Christopher Waller both dissented for a 25-basis-point cut — the first time two sitting governors have dissented together in decades.
The December vote, six weeks earlier, had gone 9-3 the other direction: Miran wanted a 50-basis-point cut, while Goolsbee and Schmid opposed any cut at all. The December minutes showed even supporters called that decision 'finely balanced'; the 2026 FOMC rotation replaced Chicago's Goolsbee and Kansas City's Schmid with Cleveland's Beth Hammack, Dallas's Lorie Logan, and Minneapolis's Neel Kashkari. Miran's four-month term expired January 31 — two days later, Trump officially nominated former Fed Governor Kevin Warsh to replace Powell as Fed Chair when his term expires in May 2026.
Republican Senator Thom Tillis (R-NC) announced he'll block any Fed nominee, including Warsh, until the DOJ's criminal investigation of Powell is 'fully and transparently resolved.' Without Tillis's vote on the Senate Banking Committee, Warsh likely can't be confirmed — a stalemate that could leave the Fed leaderless when Powell's term ends. Meanwhile, U.S. Attorney Jeanine Pirro signaled no plans to drop the probe, which Powell calls retaliation for 'setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president'; whether the Fed stays independent or gets politically captured like Turkey's and Argentina's central banks is now the bigger question.
Two Fed governors (Miran, Waller) voted for rate cut—first dual-governor dissent in decades
3.0%
December 2025 core PCE inflation
Down from recent highs but still well above the Fed's 2% target
4.6%
Unemployment rate (Dec 2025)
Highest since September 2021, signaling labor market weakness
3.5-3.75%
Current fed funds rate (held Jan 2026)
Held steady after three consecutive cuts in late 2025
1
Projected 2026 rate cuts (Dec dot plot)
Down from 3-4 cuts expected just weeks earlier; wide disagreement persists
Voices
Curated perspectives — historical figures and your fellow readers.
Andrew Mellon
(1855-1937) ·Progressive Era · finance
Fictional AI pastiche — not real quote.
"A central bank that cannot withstand political pressure is merely a government bureau in disguise. The surest way to destroy sound money is to make its guardians fear for their positions—though I note Mr. Waller's vote suggests he grasps which master now controls his future. Independence purchased through statute is worthless without men willing to defend it."
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21 events
Latest: January 31st, 2026 · 4 months ago
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January 2026
Trump to Announce Fed Chair Nominee
LatestPolitical
Trump announced January 29 he will reveal his Fed Chair nominee on January 31. Former Fed Governor Kevin Warsh expected to be the pick, according to multiple reports.
Miran's Fed Board Term Expires
Leadership
Governor Stephen Miran's four-month term on the Fed Board expires. He stated he will remain until Trump names a permanent replacement.
U.S. Attorney Signals No Plans to Drop Powell Probe
Political
U.S. Attorney Jeanine Pirro states her office contacted the Federal Reserve "on multiple occasions" but "were ignored," signaling the criminal investigation will continue despite its impact on Warsh's confirmation prospects.
Trump Officially Nominates Kevin Warsh as Fed Chair
Political
Trump announces Warsh nomination via Truth Social, stating "I have known Kevin for a long period of time, and have no doubt that he will go down as one of the GREAT Fed Chairmen, maybe the best." If confirmed, Warsh would take office in May 2026.
Senator Tillis Vows to Block Warsh Confirmation
Political
Republican Senator Thom Tillis announces he will oppose confirmation of any Federal Reserve nominee, including Warsh, until the DOJ investigation of Powell is "fully and transparently resolved." Senate Majority Leader John Thune acknowledges Warsh could "probably not" win confirmation without Tillis.
Trump Announces Friday Reveal of Fed Chair Pick
Political
At the premiere for "Melania," Trump tells reporters he has "chosen a very good person to head the Fed" and will announce the nominee Friday morning.
Fed Holds Rates Steady in 10-2 Vote
Monetary Policy
FOMC holds rates at 3.5-3.75%. Governors Miran and Waller dissent, both preferring 25bp cut—first dual-governor dissent in decades.
Powell press conference states economy on "firm footing" and defends Fed independence, saying criminal probe is consequence of refusing to follow presidential preferences on rates.
Trump Escalates Attacks: "That Jerk Will Be Gone Soon"
Political
Trump intensifies criticism of Powell, calling him "that jerk" and predicting his departure when term ends in May 2026.
DOJ Opens Criminal Investigation of Powell
Political
Federal prosecutors open criminal investigation of Fed Chair Powell over June congressional testimony about Fed headquarters renovation. Powell calls it retaliation for rate policy independence.
FOMC Voting Rotation Brings Three Hawks
Leadership
Regional Fed presidents from Cleveland (Hammack), Dallas (Logan), and Minneapolis (Kashkari) gain votes; Chicago (Goolsbee) and Kansas City (Schmid) rotate off, shifting Committee more hawkish.
December 2025
FOMC Minutes Released
Disclosure
Minutes from December 9-10 meeting expected to reveal internal debates over inflation risks versus growth concerns.
Minutes Reveal "Finely Balanced" Decision
Disclosure
Released FOMC minutes show even some who voted for the rate cut called it "finely balanced" and could have supported no change. Some participants stated rates should stay unchanged "for some time" going forward.
Three-Dissent Vote Exposes Deep Divisions
Monetary Policy
FOMC cuts 25bp to 3.5-3.75% in 9-3 vote. Miran wants 50bp cut; Goolsbee and Schmid want no cut. Powell calls it a "close call."
Dot Plot Slashes 2026 Cut Expectations
Projection
Fed officials project just one 2026 rate cut, down from three or four expected weeks earlier.
October 2025
Second Rate Cut, First Dissent
Monetary Policy
Fed cuts another 25bp to 3.75-4%. Kansas City's Schmid dissents, preferring no change.
September 2025
Fed Cuts Rates for First Time
Monetary Policy
FOMC cuts 25bp to 4-4.25% range, marking policy reversal after 14-month pause.
Stephen Miran Joins Fed Board
Leadership
Senate confirms Miran 48-47 along party lines; he also chairs Trump's Council of Economic Advisers.
July 2023
Final Rate Hike to 22-Year High
Monetary Policy
Fed completes 11th hike, bringing rates to 5.25-5.5%, highest since 2001.
June 2022
First 75-Basis-Point Hike
Monetary Policy
Fed delivers largest single increase since 1994 as inflation peaks at 9.1%.
March 2022
Fed Begins Historic Rate Hiking Cycle
Monetary Policy
FOMC raises rates 25 basis points as PCE inflation hits 6.4%, marking first hike since 2018.
Historical Context
3 moments from history that rhyme with this story — and how they unfolded.
1 of 3
1965-1982
The Great Inflation and Arthur Burns' Fatal Pause (1965-1982)
Fed Chair Arthur Burns hiked rates dramatically in 1972-74 as inflation surged, then reversed course and cut rates as recession hit. Inflation never fully died—it roared back worse. Burns repeated the stop-go pattern multiple times, never sustaining tightening long enough to break inflation psychology. By 1979, inflation hit double digits and Burns was out. Economists now view this as the Fed's greatest failure: declaring victory before inflation was vanquished.
Then
Inflation persisted through the 1970s, spiking above 10% twice while unemployment also rose—stagflation.
Now
Paul Volcker replaced Burns in 1979, hiked rates above 19%, triggered back-to-back recessions, and finally killed inflation by 1983. Unemployment hit 10%. It took brutal medicine to undo Burns' mistakes.
Why this matters now
Goolsbee and Schmid's dissents echo the lesson: cutting rates before inflation is fully defeated risks repeating the 1970s catastrophe. The three-dissent vote shows some Fed officials fear Powell is making Burns' mistake.
2 of 3
1986
The 1986 Revolt Against Volcker
Even legendary Fed Chair Paul Volcker faced internal rebellion. In 1986, the Fed Board outvoted Volcker on a rate cut, nearly prompting his resignation. The incident demonstrated that even the most respected Fed chair can lose control when Committee members hold fundamentally different economic views. Volcker had crushed inflation but faced enormous political pressure and internal dissent over keeping rates high.
Then
Volcker nearly resigned but stayed on briefly before leaving in 1987, succeeded by Alan Greenspan.
Now
Inflation stayed conquered through the 1990s and 2000s—the "Great Moderation" era—validating Volcker's tight money approach.
Why this matters now
The December 2025 three-dissent vote represents the most divided FOMC since Volcker's era. History shows even successful Fed chairs face revolts when policy stakes are high and economic views diverge sharply.
3 of 3
2014-2016
The Yellen Dissent Era (2014-2016)
Under Fed Chair Janet Yellen, FOMC members dissented 7.7% of the time—the highest rate since Volcker. Regional Fed presidents pushed for faster rate hikes while Yellen advocated patience as the economy recovered from the 2008 crisis. The divisions reflected genuine uncertainty about whether low unemployment would trigger inflation. Yellen's gradual approach ultimately proved correct—inflation stayed subdued.
Then
Yellen raised rates slowly from 2015-2018, dissents gradually faded as economic data validated her approach.
Now
The gradual hiking cycle proved too slow—some economists argue it contributed to asset bubbles and left the Fed unprepared for future shocks.
Why this matters now
Current dissent levels exceed even Yellen's fractious era. The parallel: both periods featured fundamental uncertainty about inflation dynamics and appropriate policy speed. But today's stakes are higher—inflation is real, not theoretical.
