U.S. Fed to Hold Rates Through March, Possibly Powell’s Tenure: Reuters Poll

The U.S. Federal Reserve will maintain its key interest rate at 3.50%-3.75% through March and likely until Chair Jerome Powell’s term ends in May, according to a Reuters poll of 100 economists conducted January 16–21, 2026. A majority now expect no cuts this quarter, reversing last month’s consensus for at least one reduction by March. Strong economic growth—projected at 2.3% for 2026, up from 2.2% in 2025—and persistent inflation above the Fed’s 2% target are cited as primary reasons for holding rates steady. Despite expectations of two rate cuts later in 2026, political tensions loom: President Donald Trump has criticized Powell, while a criminal investigation into Fed headquarters renovations and an attempted removal of Governor Lisa Cook have raised concerns over independence. Fifty-five of 100 economists expect rate cuts to resume in May, following Powell’s departure. Treasury Secretary Scott Bessent said Trump may appoint a new Fed chair as early as next week. Oxford Economics’ Bernard Yaros forecasts 2.8% GDP growth in 2026, driven by AI investments and tax cuts estimated to boost annual real GDP by 0.6 percentage points. Inflation, measured by the PCE index, is expected to remain above 2% through 2028. The unemployment rate is projected to average 4.5% in 2026.