Fed meeting preview; ‘limited impact’ of Trump’s housing plan 

The Federal Reserve's first meeting of 2026 is days away, though it is not expected to end with another cut to short-term interest rates.

The Jan. 27-28 meeting may not be the only Fed-related news next week: It's possible that President Donald Trump will announce his pick to replace Fed Chair Jerome Powell, whose term ends in May.

Elsewhere in Washington, D.C., the House of Representatives has passed a new bill aimed at easing affordability challenges, the Consumer Financial Protection Bureau (CFPB) is seeking more funding amid efforts to shut it down, and a new report raises doubts about the president's executive order banning corporate home purchases.

Fed meeting upcoming, Trump nominee reveal expected

What will happen at the Fed's Jan. 27-28 meeting? After three consecutive 25-basis-point cuts in the second half of 2025, Powell indicated that the central bank's voting body would hold off on additional cuts heading into 2026. Minneapolis Fed President Neel Kashkari, who has a vote on the Federal Open Market Committee this year, told The New York Times that he believes it is "way too soon" to cut rates again.

The U.S. Bureau of Labor Statistics' December inflation and jobs reports seemed to throw weight behind that approach. In an analysis citing recent labor market data, J.P. Morgan forecast zero rate cuts this year.

William Raveis Mortgage Regional VP Melissa Cohn said a January rate cut in particular is unlikely amid international tensions fueled by Trump's threats to impose additional tariffs over European countries' opposition to his interest in seizing Greenland.

"There's no way they can possibly cut rates in this political and potentially inflationary environment," Cohn said.

Fed chair announcement coming soon: Treasury Secretary Scott Bessent told CNBC that Trump may announce his Fed chair nominee "as soon as next week." The president's 11-candidate list has reportedly been narrowed down to four, though Trump recently told one rumored leading contender — National Economic Council Director Kevin Hassett — that he wants "to keep you where you are" rather than move him to the Fed.

The world will be watching to see who Trump picks in light of the U.S. Department of Justice's (DOJ) investigation into Powell, which many view as a direct threat to the Fed's ability to operate without political influence.

A group of international central bankers released a joint statement on Jan. 13 voicing support for Powell and reiterating that the central bank's independence is "a cornerstone of price, financial and economic stability." Chicago Fed President Austan Goolsbee has warned that inflation could "come roaring back" if that independence is undermined.

Questions about the Fed's independence also arose during a Jan. 21 Supreme Court hearing. Fed Governor Lisa Cook, whom Trump attempted to fire last August, is suing to keep her job — and the Supreme Court seemed inclined to let her, at least while her lawsuit plays out in lower courts.

Trump's executive order would have 'limited' impact on housing  

At the White House, Trump followed his Jan. 7 announcement about banning institutional investors from buying single-family homes with an executive order on Jan. 20.

Though Trump's order included a bit more information, some economists have said it's still missing key details and likely won't address the main issue at the heart of the nation's housing affordability problem.

In a Jan. 21 report, Oxford Economics' lead U.S. economist, Nancy Vanden Houten, noted that institutional investors — those who own 100 properties or more — only account for about 1% of the nation's housing supply, so the impact of Trump's ban "would be limited."

Trump's housing-related proposals thus far "mostly target the demand side," Vanden Houten wrote, but "without more supply, it could be counterproductive."

CFPB remains funded — for now

While the Trump administration has vowed to shutter the CFPB, a judge late last year ordered officials to continue securing its funding. The administration did request funding earlier this month, though only through March.

"Ensuring the CFPB is funded is a major victory for American consumers and the Bureau's employees," said Jennifer Bennett, an attorney representing CFPB employees, in a statement after the funding request was made. "The Bureau is crucial to protecting millions of Americans and our economy." 

Also at the CFPB last week, the bureau and the DOJ withdrew a 2023 policy protecting credit applicants from discrimination regardless of their citizenship status. Acting CFPB Director Russell Vought described the move as a shift back to "well-accepted and common-sense principles."

Affordable HOMES Act passes in the House

In a bipartisan 263-147 vote on Jan. 9, the House passed the Affordable HOMES Act, a bill that would repeal a 2022 rule on housing standards for manufactured homes. Eliminating the rule would cut red tape and lower housing costs, according to Reps. Erin Houchin of Indiana and Mike Flood of Nebraska.

"Our bill not only provides greater certainty for homebuilders; it is also a much-needed step toward making the American Dream of homeownership more affordable," Flood said in a news release.

To advance, the bill must next pass in the Senate.