A new survey shows that most economists expect the Federal Reserve to keep benchmark interest rates unchanged this quarter and may stand pat before Chairman Jerome Powell’s term ends in May. The previously widely expected rate cut before March has basically failed to materialize. Among 100 surveyed economists, 58% believe interest rates will remain in the 3.50%-3.75% range this quarter, a significant shift from last month’s expectations.

The adjustment in policy expectations stems from strong U.S. economic data: the final annualized quarter-on-quarter GDP growth in the third quarter of 2025 was 4.4%, the fastest pace in nearly two years; the core PCE price index rose 2.8% year-on-year in November, in line with expectations; initial jobless claims fell to 200,000 last week, maintaining a stable labor market. Meanwhile, the Fed is facing mounting political pressure. Trump has repeatedly criticized its policies, and controversies over Department of Justice investigations and board member changes have also raised market concerns about the independence of monetary policy.

Despite the lack of near-term rate cuts, most economists still expect at least two rate cuts later this year. Market focus has shifted to the Fed’s interest rate meeting on January 27-28, where the policy statement and Powell’s speech will provide key guidance for the subsequent rate path.