Fed holds rates steady as DOJ subpoenas Powell and Trump seeks replacement

The Federal Open Market Committee voted on January 28, 2026 to hold the federal funds rate at 3.5–3.75% after three consecutive cuts in 2025, citing inflation running near 3% against a 2% target. Separately, the Justice Department had subpoenaed Federal Reserve Chair Jerome Powell over headquarters renovation costs, a probe Powell attributed to Trump's effort to influence monetary policy. Powell's term as chair expires in May 2026; prediction markets named BlackRock bond chief Rick Rieder as the likely successor, though Trump had not yet announced a nominee.