Three regional Fed presidents dissented, pushing for a 25-basis-point hike to combat persistent inflation above the 2% target.
The Federal Reserve held its benchmark interest rate steady at 3.5%-3.75% in a 9-3 vote, defying three regional presidents who favored a 25-basis-point increase. The dissenters cited inflation remaining above the Fed’s 2% target for over five years as justification for tighter policy.
Markets had largely anticipated the hold, with CME Group’s FedWatch tool pricing a roughly 33% chance of a hike. The decision reflects ongoing divisions within the Fed, as Chair Kevin Warsh’s reluctance to signal future moves heightened uncertainty ahead of the meeting.
The dissenting votes came from Cleveland’s Beth Hammack, Minneapolis’s Neel Kashkari, and Dallas’s Lorie Logan, who have been vocal about the need for higher rates to curb inflation. The Fed’s statement noted their preference for an immediate 25-basis-point increase.