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(NEW YORK) — The Federal Reserve held interest rates steady on Wednesday, ending a string of three consecutive quarter-point rate cuts as the central bank grapples with a combination of elevated inflation and sluggish hiring.

The move marked the first interest-rate decision since news surfaced earlier this month of a federal criminal investigation into Fed Chair Jerome Powell.

The choice to maintain interest rates at their current level aligned with a cautious approach outlined by Powell last month, before reports of the investigation into his conduct.

“We’re well positioned to wait and see how the economy evolves,” Powell said at a press conference in Washington, D.C., on Dec. 10.

The benchmark rate stands at a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.

Futures markets expect two quarter-point interest rate cuts this year, forecasting the first in June and a second in the fall, according to CME FedWatch Tool, a measure of market sentiment.

The investigation into Powell ratcheted up an extraordinary clash between the nation’s top central banker and the White House, which has urged the Fed to significantly reduce interest rates.

The federal probe appears to center on Powell’s testimony to Congress last year about cost overruns in a multi-billion-dollar office renovation project. Powell, who was appointed by Trump in 2017, issued a rare video message earlier this month rebuking the investigation as a politically motivated effort to influence the Fed’s interest rate policy.

The investigation follows months of strident criticism leveled at the Fed by Trump. The president denied any involvement in the criminal investigation during a brief interview with NBC News hours after the Fed posted Powell’s video.

Over the past year, hiring has slowed dramatically while inflation has remained elevated, risking an economic double-whammy known as “stagflation.” Those conditions have put the Fed in a difficult position.

The central bank must balance a dual mandate to keep inflation under control and maximize employment. To address pressure on both of its goals, the Fed primarily holds a single tool: interest rates.

The strain on both sides of the Fed’s mandate presents a “challenging situation” for the central bank, Powell noted last month.

“There’s no risk-free path for policy as we navigate this tension between our employment and inflation goals,” Powell said.

If the Fed raises interest rates as a means of protecting against elevated inflation, it risks a deeper slowdown of the labor market. On the other hand, by lowering rates to stimulate hiring, the Fed threatens to boost spending and worsen inflation.

The criminal investigation into Powell raised concern among some analysts and former top Fed officials, who said it poses a threat to central bank independence.

In the event a central bank loses independence, policymakers tend to favor lower interest rates as a means of boosting short-term economic activity, analysts previously told ABC News. Such a posture could pose a major risk of yearslong inflation fueled by a rise in consumer demand, untethered by interest rates.

Federal law allows the president to remove the Fed chair for “cause” — though no precedent exists for such an ouster. Powell’s term as chair is set to expire in May, but he can remain on the Fed’s policymaking board until 2028. Powell has not indicated whether he intends to remain on the board.

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(NEW YORK) — Valentine’s Day shoppers may feel jilted by runaway chocolate prices.

Chocolate prices soared 14.4% over the initial weeks of 2026 when compared to the same period a year earlier, nearly doubling the pace of price increases at the start of 2025, according to findings shared with ABC News by intelligence firm Datasembly.

The sharp rise in chocolate prices owes to a cocoa shortage caused primarily by adverse weather and crop disease in West Africa, which accounts for about 70% of the world’s cocoa, some analysts told ABC News.

The dearth of cocoa, analysts said, has ratcheted up input costs for chocolate makers and vaulted retail prices, leading to sticker shock in grocery and candy store aisles.

“There is a record gap between supply and demand,” David Branch, sector manager at the Wells Fargo Agri-Food Institute, told ABC News.

Raw cocoa bean prices have risen dramatically in recent years due to the choke in supply. A metric ton of cocoa beans cost as much $12,000 last year, Branch said. Before the COVID-19 pandemic, cocoa bean prices hovered between $2,000 and $2,500 per metric ton, International Monetary Fund data shows.

In recent months, supply problems have begun to ease, bringing cocoa bean costs down significantly from last year’s peak. A metric ton of cocoa beans now runs about $3,700.

Still, chocolate prices remain highly elevated as chocolate makers sell through candy made with cocoa beans bought earlier, analysts said.

“A lot of manufacturers bought cocoa when prices were high and that’s still very much moving through the supply chain,” David Ortega, a food economist at Michigan State University, told ABC News.

In November, the White House announced framework trade agreements with some Latin American countries in an attempt to ease surging prices for grocery staples such as cocoa. While the U.S. imports a significant share of cocoa from West Africa, supply also comes from Latin American countries like Ecuador, the U.S. Department of Agriculture says.

“Today’s announcements underscore the Administration’s unwavering commitment to fair and balanced trade at every opportunity to protect and strengthen our economic and national security,” the White House said when it unveiled the framework agreements.

Prices remain high for some other imported food items, such as coffee and beef.

Coffee prices surged about 18% in January compared to a year earlier, while ground beef prices climbed more than 17% over that span, Bureau of Labor Statistics data on Friday showed.

Grocery prices are rising at a faster pace than prices overall, climbing 2.9% over the year ending in January, according to BLS data.

Chocolate price hikes will likely ease over the coming months, some analysts said, noting the eventual pass through of lower cocoa prices into the cost of chocolate bought at stores. Analysts emphasized, however, the uncertainty surrounding the outlook due to the chance of weather-related challenges for growers.

Branch, of Wells Fargo, said chocolate prices could even fall by the latter part of this year as manufacturers find cost relief and pass it along to shoppers.

“If market trends stay where they are, we’ll see lower prices for Halloween,” Branch said.

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