Federal Reserve holds interest rates steady

A divided Federal Reserve held interest rates steady on Wednesday amid persistent inflation and uncertainty in the Middle East, marking what is expected to be the final rate decision with Jerome Powell leading the central bank.

The move leaves the target range for the federal funds rate at 3.5% to 3.75%, where it has been since last December.

The vote by the Federal Open Market Committee (FOMC), which sets monetary policy, was 8–4, marking the most dissents at a meeting since October 1992.

Governor Stephen Miran, as he has done since joining the board last September, dissented in favor of a quarter-point cut.

The three other dissenters, all regional presidents, agreed with the decision to hold rates steady but took issue with the inclusion of what they called an “easing bias” in the Fed’s statement.

Mr. Powell, whose term as chair expires next month, noted that inflation has been “boosted by the significant rise in global oil prices” and was also being driven up by tariffs.

“The economic outlook remains highly uncertain, and the conflict in the Middle East has added to this uncertainty,” he said at a press conference.

The chairman also said that economic activity, consumer spending, and business fixed investment have remained solid, while the housing sector remains “weak.”

The unemployment rate has held steady at around 4.3%, while job gains remain low, in part due to slower labor force growth caused by lower immigration and participation rates.

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