The Federal Reserve voted Wednesday to hold its interest rate target steady following the first meeting for new Fed Chairman Kevin Warsh, meaning that President Donald Trump’s long-expressed desire for the central bank to lower interest rates will be unfulfilled for now. After a two-day meeting in Washington, the Fed’s monetary policy committee announced it would hold its rate target at a range of 3.50% to 3.75%. Investors had expected that outcome, as the country grapples with too-high inflation and higher energy costs stemming from the Iran war.
It is the first meeting that Warsh has overseen, and it is of particular interest given that Trump had pushed his predecessor, Fed governor Jerome Powell, hard to lower interest rates.
The vote was unanimous.
A major factor in the Fed’s decision to hold rates steady is that the labor market remains healthy and not in need of easier monetary policy. The unemployment rate is low by historical standards, and job growth has been strong heading into the summer. Job openings have risen.
Meanwhile, inflation has trended up to the highest rate in years, adding pressure on the Fed to raise rates rather than lower them.
