Fed Holds Rates — Inflation Back in Focus | Prof G Markets

Quick Overview

The Federal Reserve held interest rates steady on January 29th, as expected following three consecutive cuts last year, while noting that the outlook for economic activity has improved, inflation remains somewhat elevated, and the labor market is stabilizing, leading to an expectation that future rate cuts will be based on inflation data rather than labor market concerns.

Key Points: The Federal Reserve held interest rates unchanged on January 29th, marking the end of a streak of three consecutive cuts from the previous year. Fed Chair Jerome Powell stated that the outlook for economic activity has improved since the last meeting, with stabilizing job market signs. The Fed noted that inflation remains 'somewhat elevated' relative to their 2% target, which influences their cautious approach to future rate cuts. The 10-year Treasury yield increased, and oil prices climbed after President Trump warned Iran about a 'massive armada' following an attack. Tesla stock rose after hours due to a better-than-expected Q4 report, despite full-year revenue dropping for the first time in company history. Morgan Stanley economist Michael Gapen characterized the Fed's hold as a 'hawkish hold' rather than a dovish one, suggesting they are not yet ready to ease policy based on inflation alone. The discussion highlighted ongoing investor concern about the sustainability of US fiscal policy and the strength of the dollar, contrasting with the strong performance of AI-related stocks like Microsoft and Nvidia.

Context: This news segment from Prof G Markets, hosted by Ed Elson on January 29th, 2026, reviews the day's major market movements, focusing heavily on the Federal Reserve's decision regarding interest rates and the subsequent commentary from Fed Chair Jerome Powell. The discussion also touches upon geopolitical events affecting oil prices and major tech earnings from companies like Tesla, Microsoft, and Meta, with an expert guest, Michael Gapen, providing analysis on the Fed's cautious stance amidst mixed economic signals.