Federal Reserve holds interest rates steady as inflation stays stubbornly high

The Federal Reserve kept its benchmark interest rate unchanged at its July 29, 2026 meeting, marking the fifth consecutive session where the rate remained around 3.6%. The decision came despite persistent inflation running above the central bank’s 2% target for over five years and a surge in energy prices triggered by the Iran war. The Fed’s rate-setting committee voted 9-3 in favor of maintaining the status quo after two days of closed-door deliberations. Three regional Fed presidents—Beth Hammack (Cleveland), Neel Kashkari (Minneapolis), and Lorie Logan (Dallas)—dissented, pushing for a 25-basis-point hike to address inflation pressures. Federal Reserve Chairman Kevin Warsh presided over the meeting as the committee weighed the risks of further tightening against the backdrop of geopolitical instability and elevated price levels. The Fed’s stance signals continued caution, with market expectations now pointing to a potential rate increase at the September meeting.