Central bank leaders will announce their January interest rate decision at 2 p.m. ET. The meeting follows weeks of political pressure from the Trump administration and a recently announced Department of Justice probe.
Business Insider will be covering projections from economists, the Fed decision, and market moves all day. Check back here for updates.
The stakes are high ahead of Trump's next Fed chair pick
The DOJ probe news sparked alarm among politicians, economists, and business leaders, many of whom are concerned about the future of the central bank. Powell's term as chair expires in May, and Trump is set to announce his next pick for the role in the coming weeks.
Both Democratic and Republican leaders have signaled the probe jeopardizes the search for Powell's successor.
"If there were any remaining doubt about whether advisers within the Trump Administration are actively pushing to end the independence of the Federal Reserve, there should now be none," North Carolina Sen. Thom Tillis said, adding that he will oppose any Trump nominees to the central bank until "this legal matter is fully resolved."
What's going on in the markets
With around 7.5 hours until the Fed's latest rate decision is announced, things are a bit of a mixed bag in financial markets on Wednesday.
As of 6:30 a.m. ET futures for the three major US indexes are trending higher, with the Nasdaq leading the way, signaling a nearly 1% rise at the open. That's due in large part to its tech focus, with many of the biggest tech firms reporting earnings this week.
Elsewhere, futures for the S&P 500 are 0.4% higher, while the Dow Jones is up less than 0.1%.
In Europe, where markets are open, stocks are a little lower, with the UK's FTSE 100 benchmark down 0.5%, and Germany's DAX falling 0.2%.
Gold's record rally is continuing on Wednesday, with the precious metal extending its gain by another 3% to trade just under $5,300 per ounce. Silver is also higher, gaining 5.4% to trade at $111 per ounce.
All eyes on PowellJerome Powell is at the center for a DOJ probe launched by the Trump administration.
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Powell posted a video message on January 11 announcing that the Fed received a grand jury subpoena. The Trump administration alleges that Powell committed perjury during a June appearance before Congress, where he discussed renovations to the central bank's Washington, DC, buildings.
Business Insider obtained a letter Powell privately sent to senators detailing the Fed's construction plans and budget — the details of which match his testimony. Powell said that the probe, which could result in a criminal indictment, is an escalation of ongoing pressure from the White House.
"The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president," he said.
Today is the Fed's first decision of 2026
The Federal Open Market Committee has penciled in one rate cut for the new year. Fed leaders opted for three quarter-point cuts last fall after months of steady monetary policy.
The White House and investors are hopeful for a looser approach to interest rates in 2026. But Powell is in a tough spot: Lower rates could speed up a slow job market, but risk a rise in inflation.
CME FedWatch is predicting a near-total chance of a rate hold on Wednesday.