As expected, the Federal Open Market Committee held interest rates steady this week.
There was some tension in the room during the presser. Reporters wanted to draw the Federal Reserve Chair Jerome Powell into a dispute with President Donald Trump. Powell knew this was coming since the new president had made clear he wanted a cut in interest rates, and rates remain unchanged.
Powell never took the bait.
He responded to a question by saying that he has had no direct communication with Trump and that the committee believed that tariffs and fiscal policy did create a degree of elevated uncertainty.
The next dates to watch the Fed are Feb. 21 when the minutes of this week’s meeting will be made public, and March 18-19 when the FOMC meets again. There is likely to be White House pressure to reduce rates leading up to the next FOMC meeting.
On the Congressional front, the Senate proceeded with confirmation hearings for three of the most controversial Trump cabinet picks: Robert Kennedy Jr., Tulsi Gabbard, and Kash Patel. Next week, the Committees are likely to start voting on the three controversial picks.
House Republicans met at the Trump Doral this past week with the hopes of narrowing differences on the contentious budget issues. With the expected departure of upstate New York Representative Elise Stefanik, who will be the U.S. Ambassador to the United Nations, next week, the House Republican majority will narrow to 217 Rs to 215 Ds. Even one Republican defection would lead to a tie vote, and as we know, bills die in the House on a tie vote.
The vacant seats will be filled in the April elections.
The next big date for House Speaker Mike Johnson is March 14 when the current Continuing Resolution (CR) funding the government expires. There had been some hope that Republicans would develop a strategy that would lay out a game plan to continue government funding and extend the expired debt ceiling. There seems to have been no progress on either front.
