The Federal Reserve's latest moves have reinforced expectations that borrowing costs may remain stable throughout the second half of 2026, though a sharp divide among policymakers highlights the ongoing uncertainty surrounding inflation and the future path of monetary policy, pundits say.The US central bank left its benchmark interest rate unchanged at 3.50-3.75% following its meeting this week, yet almost half of its policymakers said they could support a rate hike later this year.
Nine Fed officials favoured keeping rates unchanged, while another nine supported at least one additional rate hike this year to bring inflation closer to the central bank's 2% target.
The split highlights concerns that inflation remains stubbornly above desired levels despite signs of moderating economic activity.
Despite the relatively hawkish tone of the debate, many economists believe the broader trajectory of US interest rates remains downward over 1-2 years.
Kobsak Pootrakool, senior executive vice-president of Bangkok Bank and chief economist of its research centre, said the latest dot plot projection of a 3.8% year-end policy rate should not necessarily be interpreted as the beginning of another tightening cycle.
