The Federal Reserve is expected to keep interest rates unchanged at its January meeting but leave the door open to a potential rate cut in March. Inflation has cooled more than expected in recent months, falling to 2.6% annually in December, down from highs near 7% earlier in 2022. However, the Fed's goal of achieving stable 2% inflation has not fully been met yet based on some measures. The job market remains strong, but wage growth accelerated slightly in December, posing risks to ongoing inflation.