Fed Holds Interest Rates Steady Amidst Political Pressure, Trump Focuses on New Initiatives
Washington, D.C. – The Federal Reserve held interest rates steady on Wednesday, January 28, 2026, taking a pause to assess the economy amidst ongoing pressure from President Donald Trump to lower rates more aggressively, according to NPR News. Federal Reserve Chair Jerome Powell addressed the central bank's independence during a press conference following the decision. "We haven't lost it. I don't believe we will. I certainly hope we won't," Powell stated, as reported by Fortune.
Powell's comments come after the Justice Department served the Federal Reserve grand jury subpoenas targeting Powell over his June 2025 congressional testimony regarding the $2.5 billion renovation of the Fed's headquarters, Fortune reported. President Trump has also publicly criticized the Fed's construction project and expressed frustration over what he views as a slow pace in cutting rates, believing the Fed is hindering economic growth, according to Fortune.
Meanwhile, President Trump has been actively promoting new initiatives, including a program to provide every American child born between 2025 and 2028 with $1,000 in new "Trump Accounts," Time reported. The President rallied business leaders in Washington, D.C., to supplement these accounts, which are a modernized form of baby bond that can be invested more widely. "Even people that truly hate me are making this investment," Trump said at the event, according to Time. Under the initiative, part of the "Big Beautiful Bill," each newborn will receive what the President called a "beautiful nest egg" of $1,000 as seed funding for an account invested in the S&P 500, with restrictions on withdrawals until a later date, Time reported.
The political landscape also saw continued protests against President Trump's immigration policies. Activists called for a nationwide general strike on Friday, January 30, to protest the President's immigration crackdown following the fatal shootings of two people by federal agents in Minneapolis, Time reported. The "National Shutdown" campaign called for a day of no school, no work, and no shopping. Thousands of Minnesotans had previously taken to the streets, and hundreds of businesses shuttered in a similar strike after an ICE officer shot 37-year-old Renee Good earlier in the month, Time reported.
Furthermore, the United States continues to be engaged in a competition with China in the field of Artificial Intelligence. According to Time, on January 20, 2025, the same day as President Trump's inauguration, a Chinese firm called DeepSeek released R1, an AI model that industry watchers called a "Sputnik moment" for the country's AI industry. "Whether we like it or not, we're suddenly engaged in a fast-paced competition to build and define this groundbreaking technology that will determine so much about the future of civilization," Trump said later that year when announcing his administration's AI action plan, titled "Winning the Race," Time reported. AI policy researcher Lennart Heim noted that the competition involves deploying AI systems in the economy, building robots, and creating various other applications, according to Time.
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