Federal Reserve holds rates steady as inflation remains elevated

The U.S. Federal Reserve voted 10-2 to keep its benchmark rate at 3.50–3.75%, citing still-elevated inflation alongside solid economic growth.

The Federal Reserve left its benchmark interest rate unchanged after a two-day meeting, citing persistent inflation alongside solid economic activity. Policy makers voted 10-2 to maintain the policy range at 3.50 per cent to 3.75 per cent. The statement offered little guidance on the timing of future rate cuts and noted that decisions will depend on incoming data and the economic outlook. Chair Jerome Powell is scheduled to hold a press conference to discuss the decision and the outlook. Key facts: - The Federal Open Market Committee voted 10-2 to keep the federal funds rate at 3.50%–3.75% after its meeting. - The Fed said inflation "remains somewhat elevated" while economic activity has been "expanding at a solid pace." - Two governors, Christopher Waller and Stephen Miran, dissented and favored a quarter-percentage-point rate cut. - The statement removed prior language saying downside risks to employment had risen and said the job market has "shown some signs of stabilization." - The unemployment rate in December was reported at 4.4%, and the Fed's preferred inflation measure was reported at about 2.8% in November in the coverage. - The recent easing cycle that included three quarter-point reductions late in 2025 is on hold for now, and a new Fed chair is expected to be named soon to lead the June policy meeting. Summary: The Fed's decision keeps policy on hold and underscores remaining divisions among officials over how quickly to cut rates given still-elevated inflation and a stabilizing job market. Powell's press conference and incoming economic data will inform the timing of any further adjustments, and a new chair is expected to be in place ahead of the June meeting.