On Wednesday, January 28, 2026 FOMC Chair Jerome Powell gave his scheduled January 2026 FOMC Press Conference. (link of video and related materials)
Below are Jerome Powell’s comments I found most notable – although I don’t necessarily agree with them – in the order they appear in the transcript. These comments are excerpted from the “Transcript of Chair Powell’s Press Conference“ (preliminary)(pdf) of January 28, 2026, with the accompanying “FOMC Statement.”
Excerpts from Chair Powell’s opening comments:
Inflation has eased significantly from its highs in mid-2022 but remains somewhat elevated relative to our 2 percent longer-run goal. Estimates based on the Consumer Price Index indicate that total PCE prices rose 2.9 percent over the 12 months ending in December and that, excluding the volatile food and energy categories, core PCE prices rose 3.0 percent. These elevated readings largely reflect inflation in the goods sector, which has been boosted by the effects of tariffs. In contrast, disinflation appears to be continuing in the services sector. Nearterm measures of inflation expectations have declined from last year’s peaks, as reflected in both market- and survey-based measures. Most measures of longer-term expectations remain consistent with our 2 percent inflation goal.
Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. At today’s meeting, the Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent.
Since last September, we have lowered our policy rate 75 basis points, or 3/4 of a percentage point, bringing it within a range of plausible estimates of neutral. This normalization of our policy stance should help stabilize the labor market while allowing inflation to resume its downward trend toward 2 percent once the effects of tariff increases have passed through. We are well positioned to determine the extent and timing of additional adjustments to our policy rate based on the incoming data, the evolving outlook, and the balance of risks. Monetary policy is not on a preset course, and we will make our decisions on a meeting-bymeeting basis.
Excerpts of Jerome Powell’s responses as indicated to various questions:
CLAIRE JONES. Claire Jones, Financial Times. Thanks a lot for taking my questions.
And another one that might lead to a similar answer.
CHAIR POWELL. Give it a try.
CLAIRE JONES. We’ve seen quite big movements in the dollar over recent days, what do you think is driving the U.S. currency lower, and have you been at all concerned just by the extent of the volatility we’ve seen this week? Thank you.
CHAIR POWELL. So, Claire, as you probably know, we don’t comment on the dollar. Really, the Administration and especially the Treasury Department has the job of oversight over the currency. And so—and exchange rates and all of that. We don’t comment on that, it’s not our—not our role. So, I have nothing for you.
CLAIRE JONES. But I mean, what’s your view on the market movements? I mean, what do you think behind them, is it asset managers diversifying? Is it—
CHAIR POWELL. Yeah, I just don’t, we don’t talk about the dollar. We don’t talk about what moves it around. And we just—it’s just not appropriate for us to do so. Really, the Treasury Department has that, it’s their—their role, their bailiwick, and we stay off it. We do monetary policy and some other things, but we don’t—we don’t comment on the dollar. Sorry.
also:
ARCHIE HALL. Archie. Archie Hall from The Economist. On that sort of stabilization of the labor market question, how much do you see the weakening we saw over the past six months, year, as the kind of data mirage around immigration, the government shutdown, and so on, that’s now resolved? Or how much have we seen a kind of real underlying firming up in the state of the labor market, do you think?
CHAIR POWELL. Well, part of it is, to your point, part of it just is that—that labor supply—growth in labor supply has come to essentially a halt from a fairly fast clip of growth over the last couple of years, driven by immigration. And then the halt being driven by a very sudden stop in immigration. So, many outcomes were possible with that, supply came way down. It turns out that demand for labor also came down a very similar amount, maybe just a little bit more, which is why the unemployment rate has gone up. So, I don’t know whether that’s a coincidence or not, but that’s what’s happened with that part. But, if you look at other things, like for example, the—just to pick a couple—the Conference Board’s measure of job availability that came out, I don’t know, was it yesterday or today? But it shows—it’s a survey showing that workers feel like job availability is—it’s a very low reading. Just one reading, but it’s an indication of softening. People—part-time for economic reasons, which is a category within the broader U6 category, measure, has moved up significantly. So there are lots of—and I could go on and on—there are lots of little places that suggest that the labor market has softened, but part of—but you’re right, part of payroll job softening is that both the supply and demand for labor has—has come down—growth in those two have come down. So that makes it a difficult time to read the labor market. So, imagine they both came down a lot, to the point where there is no job growth. Is that full employment? In a sense it is. If demand and supply are in—are in balance, you could say that’s full employment. At the same time, is it—do we really feel like that’s—that’s a maximum employment economy? It’s a challenging—it’s very challenging and quite unusual situation.
ARCHIE HALL. Thanks. And one more, on growth and the kind of strong growth outlook, or strengthening growth outlook you’re now seeing, how much of that is the fiscal stimulus we’re seeing from the Beautiful Bill, the tax cuts and all that?
CHAIR POWELL. So, you’re seeing it already. You don’t have much of a fiscal—I think the outlook, you’re right, it’s financial conditions and it’s fiscal policy for ’26, but you’ve got strong consumption that’s been happening before financial conditions have been supportive, but before the fiscal effects really are shown. So essentially the economy has, once again, surprised us with its strength. Not for the first time. Consumer spending, although it’s—it’s uneven across income categories, but consumer spending overall numbers are good, and we’re benefiting from the, from the AI build-out of data centers, that’s another thing we’re benefiting from. But the economy overall, growth is—growth is on solid footing it looks like. And it’s not just those things. It’s just that consumers—the consumer is filling out surveys that sound really negative, and then spending. So, there’s been a disconnect for some time between downbeat surveys and reasonably good spending data.
also:
MATT EGAN. Matt Egan with CNN. Chair Powell, after today you have two meetings left as Fed Chair. You’ve obviously experienced a lot during your time as Fed Chair, served under multiple presidents. I’m wondering what advice you have for whoever your successor might be.
CHAIR POWELL. Honestly, I’d say a couple things. One is stay out of elected politics. Don’t get pulled into elected politics. Don’t do it. And that’s another thing. Another is, that our window into democratic accountability is Congress. And it’s not a passive burden for us to go to Congress and talk to people. It’s an affirmative regular obligation. If you want democratic legitimacy, you earn it by your interactions with our elected overseers. And so, it’s something you need to work hard at, and I have worked hard at it. So. And the last thing is, it’s easy to—it’s easy to criticize government institutions so many ways. I will tell whoever it is, you’re about to meet the most qualified group of people you—not only have ever worked with, you will ever work with. And when you meet Fed staff, and not everybody’s perfect, but there isn’t a better cadre of professionals more dedicated to the public well-being than work at the Fed.
MATT EGAN. Thanks for that answer. If I may follow-up. As I’m sure you’ve noticed, gold and silver prices have experienced historic gains of late, and I’m wondering how much attention, if any, you pay to those moves, and what message you may take from these significant price increases we’ve seen for precious metals.
CHAIR POWELL. Don’t take much message macroeconomically. The argument can be made, that we’re losing credibility or something, it’s simply not the case. If you look—if you look at where inflation expectations are, our credibility is right where it needs to be. So, we look at those things, we don’t get spun up over particular asset price changes, although we do monitor them, of course.
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The Special Note summarizes my overall thoughts about our economic situation
SPX at 6931.29 as this post is written
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