3 key takeaways from Powell at January's Fed meeting

• The Fed opted to hold rates steady in January.
• Fed Chair Jerome Powell gave an optimistic outlook on the economy, including AI job gains.
• The Fed's pattern of dissents continues under pressure from the Trump administration.

The first Federal Reserve meeting of 2026 is in the books, and Chair Jerome Powell stayed tight-lipped on the central bank's biggest controversies.

From the job market to political tensions, here are Business Insider's biggest takeaways from the January call to hold rates steady.

Economic optimism

The Fed appeared more optimistic about the economic picture on Wednesday. While recent Fed press releases after interest rate decisions included a warning of "downside risks to the labor market," that comment was removed in January's release.

Powell said that the central bank's dual mandate — stable prices and maximum employment — is becoming more balanced than it was for much of last year. The unemployment rate is relatively low with minimal changes, even as labor market demand and hiring remain stagnant. He added that consumer spending has remained "resilient" and inflation rates are in a solid position, aside from tariff impact.

As for AI, Powell speculated that new technology is likely to have a positive effect on both companies and their employees.

"Every technological wave will eliminate some jobs and create other jobs," he said. "It's always been the case. If you look back, wave after wave after wave, there will be some disruption. But ultimately, technology increases productivity, which is the basis for rising wages. It may not all happen immediately, but over time, it's what enables incomes to rise."

Continued division among Fed leaders

The central bank has long been known for making uniform policy decisions, but the current FOMC has seen split votes in every meeting since July.

There were two dissenters in the January 28 meeting — Governors Stephen Miran and Christopher Waller hoped for a quarter-point rate cut. This is down from three dissents in the December meeting, which was the most since September 2019.

Powell said there was "broad support" on the FOMC for holding today, including among non-voters, although "there are different views on the committee" over which side of the dual mandate takes priority when data is ambiguous.

The chair did not say whether the Fed plans to cut rates next month — or whether that move would be supported within the FOMC. "Policy is not a preset course," he said. "We make decisions on a meeting-by-meeting basis."

Powell was quiet on the Fed's biggest headlines

The Fed has been in the news more than usual lately, as the Trump administration continues to put pressure on central bank leadership. The president has been vocal about his desire for bigger, faster rate cuts. And, with Powell's term as chair ending in May, Trump will be able to choose his successor.

Powell did not comment on any of the Fed chair frontrunners or provide further detail on the ongoing Department of Justice probe over construction at the bank's Washington, DC, buildings. He also dodged a question about Governor Lisa Cook's mortgage fraud case, which was heard by the Supreme Court last week. However, Powell emphasized the importance of Fed independence. It's "hard to restore the credibility of the institution" if the neutrality from political independence is lost, he said.

The Fed chair did have a piece of advice for his successor.

"Stay out of elected politics," he said. "Don't get pulled into elected politics. Don't do it."