The U.S. Federal Reserve left its benchmark interest rate unchanged at 3.5%-3.75% on Wednesday, saying economic activity continues to expand at a solid pace despite uncertainty linked to tensions in the Middle East, while inflation remains above policymakers' target.
The Federal Open Market Committee (FOMC) decided by a unanimous 12-0 vote to maintain the target range for the federal funds rate between 3.5% and 3.75%, in support of the Fed's dual mandate.
The decision marked Kevin Warsh's first FOMC meeting as Fed chair, with investors closely watching how he will handle persistent inflation, Middle East-related uncertainty and questions about the central bank's forward guidance.
The federal funds rate has remained in the current range since the Fed cut rates by 75 basis points in the second half of 2025.
The latest policy statement was significantly shorter than the previous and removed wording that had been interpreted as signaling a bias toward possible rate cuts. The move suggested policymakers are seeking to keep their options open as they assess whether the latest inflation surge will prove temporary or persistent.
