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WASHINGTON — <\/span>Federal Reserve officials are expected to keep their short-term interest rate unchanged Wednesday after three cuts last year<\/a>, ignoring huge pressure for lower borrowing costs from the White House<\/a> in favor of waiting to see how the economy evolves. <\/p>\n The central bank’s rate reductions last year were intended to shore up the economy and prevent a sharper deterioration in the job market, after hiring slowed to a near-crawl<\/a> in the wake of President Donald Trump’s sweeping tariffs last April. Yet there are signs that unemployment has stabilized<\/a> and the economy could be picking up. At the same time, inflation remains stubbornly above<\/a> the Fed’s 2% target. All those trends argue for keeping rates where they are. <\/p>\n A key issue that Chair Jerome Powell will likely address at his news conference Wednesday is how long the Fed will remain on hold. The rate-setting committee remains split between those officials opposed to further cuts until inflation comes down, and those who want to lower rates to further support hiring.<\/p>\n In December, just 12 of the 19 participants in the committee’s meetings supported<\/a> at least one more rate cut this year. Most economists forecast the Fed will cut twice this year, most likely at the June meeting or later.<\/p>\n Fed officials meet this week in the shadow of unprecedented pressure from the Trump White House. Powell said Jan. 11<\/a> that the Fed had received subpoenas from the Justice Department as part of a criminal investigation into his congressional testimony about a $2.5 billion building renovation. Powell in an unusually blunt video statement said the subpoenas were a pretext to punish the Fed for not cutting rates more quickly. <\/p>\n And last week, the Supreme Court took up Trump’s attempt from last year to fire Fed governor Lisa Cook<\/a> over allegations of mortgage fraud, which she denies<\/a>. No president has fired a governor in the Fed\u2019s 112-year history. The justices at an oral argument<\/a> appeared to be leaning toward allowing her to stay in her job until the case is resolved. <\/p>\n At the same time, Trump has suggested he is close to naming a new Fed Chair, to replace Powell once his term ends in May. The announcement could come as soon as this week, though it has been delayed before.<\/p>\n The president’s efforts to pressure the Fed may have backfired, economists say, as Republicans in the Senate voiced support for Powell and threatened to block Trump’s replacement chair. <\/p>\n \u201cThe last couple of weeks have been pretty positive for Fed independence,\u201d said Patricia Zobel, a former official at the New York Fed and now head of macroeconomic research at Guggenheim Invesments. <\/p>\n Even so, all the turmoil may have led Powell to hunker down as he nears the end of his term as chair. Vincent Reinhart, a former Fed economist and now chief economist at BNY Investments, noted that Powell has given just one speech touching on the economy since September. <\/p>\n He could be letting other Fed officials take on the job of explaining why the central bank may hold off on rate cuts in the coming months, Reinhart said. It also underscores that the chair does not make decisions on rates alone, he added,<\/p>\n \u201cThe contribution of Chair Powell to news about our understanding of the next Fed move has been as small as it\u2019s ever been, over his tenure,\u201d Reinhart said.<\/p>\n Only 12 of the 19 members of the Fed’s rate-setting committee have a vote, including all seven members of the board of governors, the president of the New York Fed, and a rotating group of four presidents from the regional Fed banks. <\/p>\n This year, Beth Hammack, president of the Cleveland Fed; Neel Kashkari, president of the Minneapolis Fed; Lorie Logan, president of the Dallas Fed; and Anna Paulson, president of the Philadelphia Fed, will vote on rate decisions. All have recently expressed some skepticism of the need for further cuts anytime soon.<\/p>\n In a speech earlier this month, Paulson said an improving economy should allow more rate cuts later in the year. <\/p>\n \u201cI see inflation moderating, the labor market stabilizing and growth coming in around 2% this year,” she said. \u201cIf all of that happens, then some modest further adjustments\u201d to the Fed’s key rate “would likely be appropriate later in the year.\u201d <\/p>\n Larger-than-usual tax refunds over the next few months should help fuel more consumer spending, economists expect. And faster growth could eventually boost hiring, which has been noticeably weak even as the economy is expanding. <\/p>\n With businesses barely adding jobs, consumers remain gloomy about the economy. The Conference Board’s measure of consumer confidence dropped to an 11-year low<\/a> in January, the business research group said Tuesday. <\/p>\n<\/div>\n