The Federal Reserve is expected to hold interest rates steady on Wednesday in a pause that investors see lasting beyond U.S. central bank chief Jerome Powell’s final meetings in March and April, with his successor expected to take office by the summer and policymakers split over whether more reductions in borrowing costs are warranted.

The most recent data showed the U.S. unemployment rate fell to 4.4% in December despite weak job growth, and economists expect the Personal Consumption Expenditures Price Index excluding food and energy costs to rise to 3% on a year-over-year basis for the month, well above the Fed’s 2% target.

With consumer spending remaining strong and fiscal policy likely boosting growth in the first months of the year, “what is clear is that, given the strength of the U.S. economy … there is no urgency to lower rates aggressively,” Seema Shah, chief global strategist at Principal Asset Management, wrote in an analysis of the Fed’s upcoming meeting.

The Fed will release its policy decision at 2 p.m. EST (1900 GMT), and Powell is scheduled to begin a press conference half an hour later to elaborate on the rate decision and economic outlook.

This week’s meeting does not include updates of policymakers’ quarterly projections about the economy and monetary policy, but projections issued after the December 9-10 meeting showed a median expectation for just one quarter-percentage-point rate cut for 2026 amid a wide split among officials.

At the meeting last month, seven of 19 Fed policymakers indicated no further cuts would be warranted for at least a year, while four said only one further cut was likely needed, and eight said rates would need to fall by at least half a percentage point in 2026.

White House Pushing for Lower Rates

President Donald Trump has called for immediate and steep reductions in the Fed’s policy rate, but the spread of opinion among officials shows the hurdle that Powell’s replacement will face in engineering anything other than modest cuts.

Trump is expected to nominate someone soon to take over when Powell’s term as Fed chief ends in May, with U.S. Senate confirmation hearings to follow.

The process has been complicated by rising antagonism between Powell and the Trump administration after it was disclosed that the Department of Justice had threatened the Fed chief with a criminal indictment – a step several Republican senators have called out as grounds to hold up confirmation of his successor given the threat implied to the central bank’s independence.

The economy, meanwhile, continues to show resilience, despite concerns at the end of the last year about a weakening labor market.

As a result, both the new policy statement and Powell’s remarks in his press conference are unlikely to commit to either the timing or the extent of further rate cuts, Michael Feroli, chief economist at J.P. Morgan, wrote last week.

The Fed’s policy-setting committee was split in December when it approved a third consecutive quarter-percentage-point rate cut, with several members only reluctantly supporting the reduction. Any changes to the statement, Feroli wrote, are likely to reflect stronger-than-expected data since then.

Powell “will easily whip up a solid majority for rates on hold,” Feroli added. “Changes to the post-meeting statement are unlikely to offer material policy signals.”

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(Reporting by Howard Schneider; Editing by Paul Simao)