Bloomberg Surveillance Instant Reaction: The Fed Decides
4 snips
Jan 28, 2026 
Torsten Slok, Apollo chief economist, on labor supply, productivity and deglobalization risks. Diane Swank, KPMG economist, on labor market frictions, underemployment and distributional effects. Bob Michael, J.P. Morgan rates strategist, on bond markets, AI-driven capex and portfolio timing. Richard Clarida, former Fed vice chair, on policy signaling, interest-rate outlook and yield-curve dynamics.
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Fed Holds Rates But Leaves Door Open
- The Fed left rates unchanged and signaled cuts are possible without specifying timing or magnitude.
- Two governors (Myron and Waller) dissented seeking a 25bp cut, shifting focus to Powell's upcoming press conference.
Waller's Dissent Reflects Labor Concerns
- Chris Waller's dissent likely reflects genuine worry about labor-market deterioration rather than mere ambition.
- The committee is debating whether weak job growth stems from lower labor supply or weaker labor demand.
Immigration Cuts Lower Payroll Benchmarks
- Reduced immigration has dramatically lowered the break-even for payroll gains, altering how job growth is interpreted.
- Torsten Slok notes the Fed's estimate for break-even nonfarm payrolls fell from ~200k to about 30k.