The Fed holds rates steady for the fifth consecutive time at 3.5%-3.75%

The Federal Reserve (the U.S. central bank) kept interest rates unchanged for the second consecutive time in Kevin Warsh’s tenure, disregarding calls from President Donald Trump to lower them.

The Fed held its main overnight interest rate steady within the range of 3.50% to 3.75%. The decision was approved by a vote of 9 to 3, with three members dissenting, as the Fed reaffirmed its commitment to maintaining its existing policy of keeping reserve levels adequate within the banking system.

The statement from the Federal Open Market Committee noted that economic activity continues to expand at a strong pace despite elevated uncertainty, partly attributable to the ongoing conflict in the Middle East. It highlighted robust growth in productivity and capital investment, alongside job gains that have kept pace with labor force growth, leaving the unemployment rate largely unchanged.

Regarding prices, the statement pointed out that inflation remains elevated compared to the committee’s 2% target, partly reflecting supply-side shocks that have driven up prices in specific sectors, particularly energy. The committee reiterated its commitment to achieving price stability. President Donald Trump had previously called on the Federal Reserve to cut interest rates, stating that the United States should have the lowest interest rates in the world.