The US Federal Reserve is widely expected to keep interest rates unchanged when it meets in the coming week, holding firm despite President Donald Trump’s pressure to slash levels as it guards against threats to its independence.The central bank has cut rates three consecutive times since September as the jobs market weakened, bringing them to a range between 3.50 percent and 3.75 percent.But Fed Chair Jerome Powell has signaled the bar would be higher for a further reduction in January. They meet on Tuesday and Wednesday.”The fact that growth is strong, unemployment is low, equity markets are close to all-time highs and inflation is above target all argue for a pause,” said analysts at ING bank.Powell’s robust defense of Fed independence in response to ongoing pressure from Trump to lower rates confirms this, ING added.On January 11, Powell released a rare, solemn statement revealing that the Department of Justice was investigating him over a $2.5 billion renovation of the bank’s headquarters.He slammed the threat of criminal charges as the result of policymakers setting rates in the public’s best interests — rather than bowing to the president’s wishes.Trump has made no secret of his disdain for Powell, claiming there is “no inflation” and repeatedly questioning the Fed chair’s competence and integrity.Yet, US inflation has been well above the bank’s two-percent target for over five years, said former Cleveland Fed president Loretta Mester.”I think the Fed needs to keep a pretty tight eye on where the inflation is going,” she told AFP.Price increases could cool after Trump’s trade tariffs filter through the world’s biggest economy, but Mester flagged the need for “more convincing evidence.”Meanwhile, existing cost hikes have brought about a “large wedge” between how affluent and lower-income households view the economy, said KPMG chief economist Diane Swonk.Even if the gap could temporarily narrow as fiscal stimulus hits in early 2026 — with a rise in tax refunds incoming due to tax cut expansions — this could “cause a more entrenched bout of inflation,” she warned.Another complication is stagnating employment, forcing policymakers to walk a tightrope between lowering rates to boost the economy and keeping them higher to curb inflation.- External pressure -The Fed meets eight times a year to consider interest rate levels, and Michael Pearce of Oxford Economics said the dilemma it faces has eased.Figures suggest that risks to the labor market appear less pressing than a few months ago, while the likelihood of rising inflation also seems to have moderated, he said in a note.Nonetheless, events outside of the rate-setting committee “have the potential to shake up the path of monetary policy,” Pearce added.Besides the probe into Powell, Trump has sought to fire Fed Governor Lisa Cook, sparking a legal battle crucial to shaping how much discretion the president has in changing the Fed’s leadership.A president can only fire Fed board members “for cause,” traditionally understood to mean malfeasance or dereliction of duty.But the Trump administration appears to be pushing a broader interpretation, as Trump moved to fire Cook over mortgage fraud allegations she denies.The Supreme Court heard arguments on the issue on Wednesday, and Cook stressed in a statement afterwards the importance of insulating the Fed from political threats.She said her case is about whether the Fed will set rates “guided by evidence and independent judgment or will succumb to political pressure.”Pearce flagged a “small risk” that the government succeeds in ousting Cook, saying this could “pave the way for a substantial dovish transformation on the committee over time.”Policymakers seen as “hawkish” favor higher rates to fight inflation, while a “dovish” Fed tends towards lower levels.Analysts expect Powell to avoid discussing political issues at his press briefing after the two-day Fed meeting on Wednesday, while divisions remain over the path of future policy.

A massive winter storm on Saturday dumped snow and freezing rain on New Mexico and Texas as it swept across the United States towards the northeast, threatening tens of millions of Americans with blackouts, transportation chaos and bone-chilling cold.Shoppers stripped supermarket shelves as the National Weather Service (NWS) forecast huge snowfall in some areas and possibly “catastrophic” ice accumulations.Transportation Secretary Sean Duffy warned that up to 240 million Americans could be affected by the storm. At least 16 states and the US capital Washington have declared states of emergency.”Take this storm seriously, folks,” the NWS said on X, predicting an “astonishingly long swath” of snowfall from New Mexico to Maine.More than 3,900 flights in and out of the United States were canceled on Saturday alone, and more than 3,000 others were delayed, according to tracker FlightAware.In Dallas, which has typically mild temperatures in January, freezing rain pelted the Texas city and the mercury plummeted to 21F (-6C).Houston Mayor John Whitmire meanwhile urged residents of the country’s fourth most populous city to hunker down by late Saturday : “Be where you need to be for the next 72 hours.”Eric Maple, a 56-year-old homeless man, was waiting Sunday for a warming center to open in Houston.”We’re not used to what’s supposed to be coming,” he told AFP.”It disrupts things in Houston, but our city’s strong and we’ve got good people here, so we all try to pull together.”State officials vowed that the Texas power grid was in better shape than five years ago, when it failed during a deadly winter storm and left millions without power.Nearly 130,000 US customers were without power as of Saturday afternoon, according to tracking site poweroutage.us, with over 50,000 reported in both Texas and neighboring Louisiana.Snow also hit Oklahoma and Arkansas, where some spots already recorded six inches (15 centimeters) on the ground, the NWS said.After battering the country’s southwest and central areas, the storm system was expected to hit the heavily populated mid-Atlantic and northeastern states before a frigid air mass settles in.”The snow/sleet impacts will linger well into next week with rounds of re-freezing that keeps surfaces icy and dangerous to both drive and walk on for the foreseeable future,” the weather service said. The US federal government preemptively announced offices in Washington would be closed on Monday.”We will continue to monitor, and stay in touch with all States in the path of this storm. Stay Safe, and Stay Warm!” US President Donald Trump, who was riding out the storm at the White House, said on his Truth Social platform. – Polar vortex -The brutal storm system is the result of a stretched polar vortex, an Arctic region of cold, low-pressure air that normally forms a relatively compact, circular system but sometimes morphs into a more oval shape, sending cold air spilling across North America.Scientists say the increasing frequency of such disruptions of the polar vortex may be linked to climate change, though the debate is not settled and natural variability plays a role.But Trump — who scoffs at climate change science and has rolled back green energy policies — questioned how the cold front fit into broader climate shifts.”WHATEVER HAPPENED TO GLOBAL WARMING???” the Republican leader posted on Truth Social.The NWS warned that heavy ice could cause “long-duration power outages, extensive tree damage, and extremely dangerous or impassable travel conditions,” including in many states less accustomed to intense winter weather.- ‘Five or six minutes’ -New York Governor Kathy Hochul warned residents to stay inside amid frigid conditions: “Five or six minutes outside could literally be dangerous for your health.”She stressed precautions like protecting pipes, using heaters safely, and checking on vulnerable neighbors.Authorities warned of life-threatening cold that could last a week post-storm, especially in the Northern Plains and Upper Midwest, where wind chill lows were forecast to dip to extremes under -50F (-45C).Such temperatures can cause frostbite within minutes.