US Fed keeps rates unchanged as inflation, oil risks linger
What's the story
The US Federal Reserve has decided to keep its key interest rate unchanged, amid surging oil prices, growing inflation risks, and leadership transition at the central bank. The decision was made during Chair Jerome Powell's potentially last meeting as head of the rate-setting Federal Open Market Committee (FOMC). The committee voted to maintain the benchmark funds rate between 3.5%-3.75%, a move that markets had fully anticipated.
Dissent details
FOMC's decision divided with an 8-4 vote
The FOMC's decision was divided with an 8-4 vote, the first such dissent since October 1992. Governor Stephen Miran, who joined the central bank in September 2025, voted for a quarter percentage point cut. The other three dissenters were regional presidents Beth Hammack of Cleveland, Neel Kashkari of Minneapolis and Lorie Logan of Dallas. They supported holding rates but opposed including an easing bias in the statement at this time.
Investigation update
Powell announces indefinite stay on Board of Governors
After the central bank's decision, Powell announced his indefinite stay on the Board of Governors. He said he is waiting until the investigation into Federal Reserve's renovations is well and truly over "with transparency and finality." This comes as markets were widely expecting the hold and are pricing in no changes for the rest of this year and well into 2027.
Leadership transition
Kevin Warsh is set to be the next Fed chair
Earlier in the day, the Senate Banking Committee approved President Donald Trump's nomination of Kevin Warsh as the next Fed chair. The full Senate is expected to follow suit, marking a historic leadership change at the Fed since Powell took over in 2018.