SummaryAs was widely expected, the FOMC held the fed funds rate steady at its January meeting. The statement and Chair Powell’s press conference suggested that the Committee is finely balanced between worries about a gradually deteriorating labor market and still above-target inflation. Our main takeaway from today’s meeting is that the hurdle to additional cuts has been raised under Chair Powell’s watch. The more balanced risks to the Fed’s dual mandate came through in Chair Powell’s press conference. Yet, as we have stressed recently, the risks to this call look increasingly skewed toward later and less easing as our expectations for solid GDP growth and a stabilizing labor market later this year leave a narrow window to cut.