Fed Holds Interest Rates Steady Despite Stubborn Inflation
The Federal Reserve voted 9-3 on July 29, 2026, to hold its benchmark interest rate steady at 3.5%-3.75%, marking the fifth straight meeting without a change, as inflation stays stubbornly above the Fed's 2% target.
Key points:
- Three regional presidents — Cleveland's Beth Hammack, Minneapolis's Neel Kashkari, and Dallas's Lorie Logan — dissented, wanting a rate hike instead.
- The Fed's statement said inflation "remains elevated relative to the Committee's 2 percent goal, in part reflecting supply shocks... including energy."
- Core PCE inflation rose from 3.0% in December 2025 to 3.4% in May 2026, while oil prices jumped from around $57/barrel early in the year to over $113 in April.
- Rising energy costs tied to the U.S.-Iran conflict have fueled expectations that the Fed could hike rates later this year rather than cut.
- Fed Chair Kevin Warsh said "economic activity is expanding at a solid pace despite elevated uncertainty" from the Middle East conflict.
- The next FOMC meeting is scheduled for September 15-16, 2026.
Sources:
2. CNBC
3. Fox Business
4. NPR
5. U.S. Bank