January 2026 FOMC Debrief

Summary

Joseph Wang debriefs the January 2026 FOMC meeting, which was uneventful and left rates unchanged. He highlights two dissents, Powell's refusal to reveal his post-chairmanship plans, and the market debate over foreign dollar hedging and gold's surge. His main market takeaways are that the gold rally looks speculative rather than a debasement signal, while foreign inflows continue to support the dollar despite hedging concerns.

• FOMC left rates unchanged; market had priced no cut.
• Waller dissented surprisingly; Miran moderated to a 25bp cut dissent.
• Powell did not disclose whether he will remain at the Fed after May.
• The BIS hedging thesis was questioned because FX swap basis is not deeply negative.
• Powell and fund-flow data suggest foreign investors still buy dollar assets.
• Gold's rally was attributed to momentum/speculation, not inflation credibility loss.
• Iran war headlines were noted as a possible secondary gold factor.
• Next policy focus is the White House's Fed chair announcement.