Federal Reserve keeps the interest rates unchanged

The Federal Reserve on Wednesday held interest rates steady, maintaining the target range for the federal funds rate at 3.5% to 3.75%.

Policymakers pointed to solid economic growth and lingering inflation pressures while emphasizing continued uncertainty around the outlook.

In its policy statement, the Fed said economic activity has been expanding at a “solid pace,” though job gains have remained low and the unemployment rate has shown signs of stabilizing. Inflation, however, remains “somewhat elevated,” keeping pressure on the central bank as it balances its dual mandate of maximum employment and price stability.

The Federal Open Market Committee said it will continue to assess incoming economic data to determine whether further policy adjustments are needed, noting that risks to both growth and inflation remain elevated.

Policymakers reiterated their commitment to returning inflation to their 2% target over the longer run and said they stand ready to adjust monetary policy if emerging risks threaten that goal.

The decision was supported by Chair Jerome Powell and a broad majority of the committee, though two members—Stephen Miran and Christopher Waller—dissented, favoring a quarter-point rate cut at this meeting.

Their dissent highlights a growing debate within the Fed over how quickly inflation is cooling and whether policy is now restrictive enough to warrant easing.