The Federal Reserve's first meeting of 2026 is scheduled to begin on Tuesday morning as officials aim to balance their dual mandate of stable prices and full employment, all while concerns about Fed independence swirl.

Markets expect the central bank to keep interest rates unchanged at the conclusion of its two-day policy meeting, with probabilities from the CME Group showing a 97% chance the Fed holds rates steady in a range of 3.5%-3.75%.

Fed officials have signaled they will go meeting by meeting to determine the policy path after the Fed cut interest rates three times in the second half of 2025. Divisions over the path for inflation and the labor market have dominated recent Federal Open Market Committee meetings, with officials in December voting against the Fed's 0.25% rate cut in both directions.

At the December meeting, officials projected just one interest rate cut in 2026.

Meanwhile, questions over Fed independence still loom over January's meeting.

The Supreme Court heard oral arguments in the case over President Trump's attempt to remove Fed governor Lisa Cook from her role earlier this month, and Wednesday's announcement will mark the first since the Justice Department's criminal investigation into Fed Chair Jerome Powell was disclosed. Trump is also expected to name his pick for Powell's successor to lead the central bank in the coming days.

Follow along for the latest updates.

US stocks mostly rose as markets opened ahead of the start of the Federal Reserve's two-day policy meeting.

The S&P 500 (^GSPC) and Nasdaq (^IXIC) climbed 0.3% and 0.6%, respectively, at the open, while the Dow Jones Industrial Average (^DJI) lost about 0.7% on the backs of declines in health insurer stocks like UnitedHealth (UNH).

Treasurys held steady with the 10-year yield (^TNX) standing at 4.22% and the 30-year yield little changed at 4.81%.

The Fed will bring its first policy decision of the year on Wednesday. While it is widely expected to hold the benchmark interest rate steady, markets are watching for signals on the timing of future rate cuts.

Read more about today's market action ahead.

The next Federal Open Market Committee meeting is scheduled to begin on Tuesday, Jan. 27, and run through Wednesday, Jan. 28, when Fed Chair Powell is expected to deliver a statement and press conference announcing the FOMC's interest rate decision.

The FOMC holds eight regularly scheduled meetings per year. After January's meeting, the FOMC isn't scheduled to reconvene until March.

Here's the Fed's full meeting schedule for 2026:

January 27-28

March 17-18*

April 28-29

June 16-17*

July 28-29

September 15-16*

October 27-28

December 8-9*

* Meeting associated with a Summary of Economic Projections.

Read more frequently asked questions about the Fed here.

Although mortgage rates often anticipate a Fed rate move, rising or falling well before the FOMC announces its decision, rates have found another motivator in recent weeks: President Trump's policy proposals.

Yahoo Finance's Hal Bundrick writes:

When the Fed goes into its \\"wait and see\\" mode, as it is now, mortgage rates look for a catalyst elsewhere. Current fed funds futures, as measured by the CME Group, expect a quarter-point rate cut no sooner than June. But mortgage rates have done anything but wait.

In a Jan. 21 analysis, Joel Kan, vice president and deputy chief economist of the Mortgage Bankers Association, noted recent lower home loan rates.

“Mortgage rates declined further last week, driving another big week for refinance applications, which saw the strongest level of activity since September 2025,\\" Kan said. Loan applications, as measured by the MBA composite index, increased by over 14% from the previous week, and refinancing rose by 20% over the same one-week period. Refinances were 183% higher than the same week one year ago.

On Thursday, Jan. 22, Freddie Mac reported that 30-year fixed-rate loans increased by only three basis points from the three-year low of 6.06% reported just last week.

Without a Fed rate cut in sight, what moved rates over the past two weeks? It was President Trump announcing potential housing affordability initiatives.

Read more here.

The US Federal Reserve is among several central banks providing policy updates this week and next.

Notably, the Bank of Canada is widely expected to hold interest rates at the same level on Wednesday. After cutting last year, economists forecast the BoC will hold the policy rate in a neutral position at 2.25%, though they are closely watching the renegotiation of the US-Mexico-Canada Agreement (USMCA) this year for clues on the policy path for the rest of 2026.

Brazil's Central do Brasil will also hold a monetary meeting on Wednesday, while Sweden's Sveriges Riksbank and the South African Reserve Bank meet on Thursday.

Next week, the European Central Bank's monetary policy committee is scheduled to convene on Thursday, Feb. 5, as is the Bank of England. The following day, investors will hear from Mexico's central bank, the Banco de Mexico.

Many central banks, including the European Central Bank, Bank of England, and Bank of Canada, are considered to be in a cautious holding position as inflation has cooled but risks to growth remain.

As Yahoo Finance's Ben Werschkul reported Monday, the odds of a US government shutdown coming at the end of the month rose sharply over the weekend.

And after a 43-day shutdown complicated the Federal Reserve's task in the fall with data delayed or canceled, the same challenge could face the central bank ahead of its March meeting.

This is the meeting, notably, that many on Wall Street expect to see the Fed cut rates again.

\\"Should another extended shutdown occur, it would leave the FOMC in a tricky spot,\\" wrote Wells Fargo economists Michael Pugliese and Tom Porcelli in a note on Monday.

\\"The lack of visibility that arises from receiving limited economic data could thrust an already divided FOMC into a period of stasis. Fed officials lamented the lack of clarity on inflation during the last shutdown. We expect they would again use this argument to delay additional cuts. We have maintained that the window is closing for the Fed to cut rates again under Chair Powell, and another extended shutdown would not help.\\"

US Treasury yields declined on Monday while stocks and gold rose ahead of the Federal Reserve's policy meeting and a busy week of Big Tech earnings.

The 10-year yield (^TNX) declined 2 basis points to 4.21%, while the 30-year yield (^TYX) also dropped 2 basis points to 4.8% as the odds of a government shutdown rose following a shooting in Minneapolis.

Long-dated yields continued to ease after a sell-off in Japanese bonds and geopolitical tensions led to a spike last week. While bouts of turmoil in markets and questions over Fed independence have created volatility to start 2026, investors broadly view the US economy as stable and expect the Fed to hold interest rates steady.

Read more about Monday's market action in stocks, gold, and more.

While investors expect the Federal Reserve will make no change to its interest rate policy on Wednesday, how many FOMC officials vote against the action could emerge as the biggest headline from the meeting.

In December, three officials voted against the Fed's decision to cut rates by 0.25% — Fed Governor Stephen Miran voted for the Fed to cut rates by 0.50%, while Kansas City Fed and Chicago Fed presidents Jeff Schmid and Austan Goolsbee both would've preferred the central bank keep rates unchanged.

Both Schmid and Goolsbee issued statements in the days following the meeting to elaborate on their thinking.

This also marked the first time since 2019 that there were dissents on both sides of the Fed's decision.

The first Federal Open Market Committee meeting of 2026 is expected to see the central bank make no change to its benchmark interest rate target, which currently stands in a range of 3.5%-3.75%.

“I don’t think there will be a whole lot of activity other than holding rates. The Fed is at a point where they can be patient, and we don’t need to do anything. Short, sweet,” said Wilmer Stith, senior bond portfolio manager for Wilmington Trust.

“I think it’ll be see what data says, decide, and wait for more data and decide, gently gliding down their landing.”

Read Jennifer Schonberger's full story here.