The Federal Reserve keeps rates unchanged; USD savings portfolio at 3.25%

The Fed Keeps Rates at 3.5%.

At the January 2026 meeting, the Federal Reserve decided to keep the Fed Funds rate (the U.S. benchmark interest rate) in the 3.50%–3.75% range, as the market had expected.

Current rates are slightly above what is considered their long-term equilibrium level (around 3%). At the same time, inflation remains at 2.7%, still above the 2% target, so the current rate level seems consistent. In the statement accompanying the decision, the Fed removed the reference to increased risks in the labor market.

Trump Pressure Continues

Meanwhile, President Trump continues to publicly push for a significant cut in official rates, which would help reduce the financing cost of the U.S. public debt.

During the press conference, several journalists’ questions focused specifically on the tension between the Fed and the White House and the possible existence of political pressure on the central bank.

It is worth recalling that, following the opening of a criminal investigation by the Department of Justice related to renovation work at the Fed’s headquarters, Jerome Powell accused the Trump administration of using that process as political retaliation for the central bank’s decisions. This represents an unprecedented conflict between the Fed Chair and the President of the United States, although Powell avoided commenting further.

Jerome Powell’s term as Fed Chair expires in May. However, his position as a member of the Board of Governors extends until 2028. Following the recent nomination of the new Fed Chair, market attention now shifts to the guidance the institution may adopt under the new leadership. The choice is not trivial: the Trump administration seeks a profile more inclined to cut interest rates, but at the same time, it is crucial to preserve the central bank’s credibility and independence to avoid a loss of confidence that could lead to a rise in public debt yields.

So far, the feared surge in inflation following the imposition of tariffs has not materialized. Long-term inflation expectations remain relatively well anchored, supported by productivity gains from adopting new technologies related to artificial intelligence and automation, as well as contained energy prices.

Future Rate Outlook

In this context, the Fed’s next move is likely to be a rate cut, although the timing and magnitude depend both on the new leadership and the evolution of macroeconomic data.

The current situation combines still-solid economic growth with a slowdown in the demand for new hires by companies—a phenomenon that could become structural as the use of artificial intelligence becomes more widespread.

USD Savings Portfolio Remains at 3.25%

The fact that rates have remained unchanged is, in any case, good news for our USD Savings portfolios, which are the most directly affected by monetary policy decisions.

The current yield to maturity (YTM) of 3.25% in dollars remains historically very attractive and highly competitive compared with interest on deposits and savings accounts, even in dollars.

Since we launched the Savings Portfolio through 12/31/2025 in dollars, the accumulated return has been 14.5%, which is 9.1 percentage points higher than the accumulated return of 1-year USD deposits (according to the FDIC), which only accumulated 5.4% over the same period.

Our USD Savings Portfolio remains the best alternative for maintaining an emergency fund if your main currency is the dollar (or if you want to have part of your wealth exposed to the dollar while accepting currency risk). On the other hand, if you are exposed to the Euro, it is more convenient to consider the Euro Savings Portfolio to avoid currency risk.

A Portfolio for Every Horizon, Goal, or Profile

The following table can help you find the most suitable portfolio depending on your objectives and time horizons.

For investors who prefer to lock in a fixed return for a longer period, accept slightly more risk, or can set a term, we remind you that we have a full range of target return portfolios and bond portfolios (both in Euros and dollars) that allow extended exposure to longer maturities/durations.

If your horizon is medium or long term, it is more convenient to consider our index fund portfolios, and for retirement, our pension plan portfolios, as shown in the table above.

To find the best portfolio for you, discover your investment plan.