Discount and federal funds rates maintained at existing levels

Federal Reserve Bank directors reported stable economic conditions and a generally positive outlook across their Districts in January.

Most employers maintained headcounts, with layoffs remaining limited.

Easing labor market conditions, including strong labor availability and low turnover rates, helped alleviate wage pressures.

However, budget pressures from rising healthcare costs were frequently cited.

Directors also noted sustained business investments in technology and artificial intelligence to promote efficiency.

Ongoing economic effects of tariff-related price increases and challenges in passing higher costs to consumers were mentioned by many.

Several directors also commented on continued economic stress for low-income households.

The Federal Reserve Board maintained the primary credit rate at 3.75 percent in January.

This action also renewed existing formulas for secondary and seasonal credit programs, setting the secondary credit rate 50 basis points above the primary.

At the January 28 joint meeting, the Federal Open Market Committee (FOMC) decided to maintain the federal funds rate target range at 3-1/2 to 3-3/4 percent, effective January 29. The Board concurrently approved maintaining the interest rate paid on reserve balances at 3.65 percent.

The January 28 actions were approved by Chair Powell, Vice Chair Jefferson, Vice Chair for Supervision Bowman, and Governors Waller, Cook, Barr, and Miran.