Fed Holds Rates Steady but Three Officials Back Increase

The Federal Reserve on Wednesday kept interest rates unchanged despite growing divisions among policymakers to more directly tackle inflation after five years of overshooting the central bank’s 2 percent target.

The Fed voted 9-3 to maintain rates at 3.5 to 3.75 percent, a level that has been in place since January. Beth M. Hammack of the Federal Reserve Bank of Cleveland, Neel Kashkari of the Minneapolis Fed and Lorie K. Logan of the Dallas Fed dissented, voting instead for a quarter-point increase.

The divisions underscore the tough spot the Fed and its chairman, Kevin M. Warsh find themselves in as they grapple with new sources of price pressures that are threatening to compound an already complicated and longstanding inflation problem.

Oil prices have whipped around in recent days with the Iran war in a delicate limbo. A deal to end the conflict and reopen the Strait of Hormuz, a crucial shipping path for global energy markets, remains distant. President Trump, speaking to reporters on the heels of the Fed’s decision, signaled that the fighting was far from over. He said the United States would mount another round of attacks against Iran. “It’s our turn,” he said, promising to “hit them very hard.”

Article source: https://www.nytimes.com/2026/07/29/business/economy/what-to-watch-at-the-meeting.html