United States Federal Reserve

The United States Federal Reserve (US Fed), headed by Jerome Powell, is the central bank of the US. Recent news highlights its role in navigating economic uncertainty and political pressures. In late 2025, the Fed cut interest rates three times, including a final cut in December, amid a clouded economic outlook. In early 2026, the Fed has held interest rates steady at 3.5-3.75% despite calls for cuts from President Trump, citing ‘elevated’ economic uncertainty and a cooling labor market, even as January job growth surpassed expectations. The Fed's independence is being tested by political pressure, including a Trump administration effort to revisit a ruling blocking subpoenas related to Chairman Powell and a Supreme Court case regarding the attempted firing of Fed governor Lisa Cook. Powell's attendance at the Supreme Court session underscores the gravity of the situation. These events highlight the Fed's crucial role in maintaining economic stability amidst political and legal challenges, with global implications for emerging markets.