By William Collins, consultant in stock markets – Eurasia Business News, January 28, 2026. Article no 2017
Jerome Powell has been emphasizing that the U.S. economy started 2026 in solid shape, with growth holding up, inflation easing from prior peaks, and the labor market stabilizing rather than deteriorating.
What Powell means by “firm footing”
Powell has pointed to solid economic activity, noting that incoming data since late 2025 show a stronger growth outlook than the Fed expected a few months earlier, helped by resilient consumer spending and continued business investment.
The Fed Chair says job gains are modest but ongoing and the unemployment rate has “stabilized,” which, in the Fed’s view, means the labor market is cooling from its very tight peak without sliding into broad weakness.
U.S. inflation has come down toward roughly 3% on core measures, and he has argued that as temporary tariff‑related pressures on goods fade, inflation should continue gradually moving toward the Fed’s 2% goal.
U.S. consumer prices rose 2.8% in November from a year earlier, the U.S. Commerce Department said Thursday, up from a 2.7% annual pace in October. Excluding the volatile food and energy categories, core prices also increased 2.8% in November from a year ago, slightly higher than October’s 2.7%.
Policy implications
Because the economy is on this “firm footing,” the Fed judged it could pause rate cuts at the January 28 meeting, keeping the federal funds rate at 3.5%–3.75% while it watches how past easing affects growth and inflation.
Powell has stressed that monetary policy is “not on a preset course”: future moves will be decided meeting by meeting, depending on whether inflation keeps moderating without a material worsening in employment.
In practical terms, his message is that recession risks look lower than they did a year ago, but inflation is not yet “mission accomplished,” so the Fed is trying to balance support for growth with caution about cutting rates too far, too fast.
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© Copyright 2026 – Eurasia Business News. Article no. 2017
Eurasia Business News 