As we approach the start of the January 2026 meeting, there is a growing sense of uncertainty among economists and market analysts. The latest indicators suggest that the Federal Reserve may finally be considering a rate cut, something that has been highly anticipated but never quite materialized in recent months. While some have long argued for a more aggressive monetary policy stance to combat slowing economic growth, others have remained skeptical, citing concerns over inflation and the potential risks of overshooting.

So what does it mean when we hear that “Jan cut begins to leave the building”? Simply put, it means that there is a growing likelihood that the Federal Open Market Committee (FOMC) will lower interest rates at their upcoming meeting. The phrase is derived from the idea that the FOMC typically meets eight times per year, with the majority of these meetings resulting in no change to interest rates. However, when the phrase “Jan cut begins to leave the building” is used, it suggests that there is a higher probability of a rate cut occurring at the next meeting.

But what are the odds of a rate cut actually happening? According to the latest US0APR JAN2026 Index, the probability of a 25 basis point cut at January’s meeting sits at around 70%. While this may seem like a significant jump from previous meetings, it is important to keep in mind that the Fed has a dual mandate to promote maximum employment and price stability. Any decision to lower interest rates must be carefully weighed against these competing goals.

So what does this mean for the US economy? While a rate cut may provide some short-term relief for borrowers and investors, it is important to consider the potential longer-term implications. For example, if inflation remains subdued and economic growth continues to slow, a rate cut may be seen as unnecessary and potentially even counterproductive. On the other hand, if inflation begins to tick upwards or economic growth accelerates, the Fed may be hesitant to lower interest rates too aggressively, lest they exacerbate these issues.

While the possibility of a rate cut at January’s FOMC meeting is certainly intriguing, it is important to approach any such decision with caution and a deep understanding of the complex economic factors at play. Only by carefully weighing the potential risks and benefits can we truly determine what “Jan cut begins to leave the building” means for the US economy.