Schmid, one of three dissenters in Federal Reserve’s decision for quarter-point rate cut in December, said that with inflation above the Fed’s 2% target for more than four years policymakers don’t have room to be complacent.

President Donald Trump said December inflation data supports his calls for Federal Reserve Chair Jerome Powell to cut interest rates after CPI showed 2.7% annual price growth.

The report shows that inflation continued to trend down in 2025, after exploding to the highest rates in decades in 2021 and 2022.

The December U.S. jobs report was just good enough to persuade investors the Federal Reserve won’t cut interest rates again in January. Stubborn inflation could ensure the Fed stands pat.

Federal Reserve Bank of Atlanta Pres. Raphael Bostic knows hiring has cooled off, but he remains most concerned about keeping inflation heating up. The Fed's main tool to fight inflation is higher interest rates,

Interest rates are likely to edge lower in 2026 as the Fed weighs inflation, jobs and political pressure. See what forecasts suggest for the year ahead.

After cutting interest rates three times in a row last year, the Federal Reserve indicated last month it probably won’t lower interest rates again for a while. A months-long pause, cemented by key economic data released Friday,