WASHINGTON— As expected, the Federal Reserve on Wednesday left its benchmark federal funds rate unchanged at 3.5% to 3.75%, while signaling it still sees room for cuts later if inflation and labor-market data cooperate.
In its post-meeting statement, the FOMC said economic activity continues to expand at a “solid pace,” but noted inflation remains elevated, partly due to the recent jump in global energy prices.
The Fed also added fresh geopolitical caution, saying developments in the Middle East are contributing to “a high level of uncertainty” around the economic outlook. Even so, the committee indicated it will weigh “the extent and timing of additional adjustments” to rates based on incoming data, the evolving outlook and the balance of risks—wording that kept an easing bias in place despite disagreement inside the committee.
That split was more visible this time. Governor Stephen Miran dissented in favor of an immediate quarter-point rate cut, while Beth Hammack, Neel Kashkari and Lorie Logan backed holding rates steady but opposed including any easing bias in the statement. The vote leaves Chair Jerome Powell balancing sticky inflation, a softening-but-stable labor market and rising external risks as markets continue parsing when the Fed may feel comfortable moving lower.
“The FOMC held rates steady amidst a backdrop of stable economic activity and volatile energy prices," said America's Credit Unions' Chief Economist Curt Long. "There were four dissents, one favoring a rate cut and three preferring more hawkish language in the statement. Incoming chair Warsh inherits a committee with deepening divisions and growing inflationary concerns. Elevated borrowing costs are one more factor weighing on affordability, but credit unions are doing their part to ease those pressures. In 2025 alone they provided over $42 billion in financial benefits to everyday Americans by offering the best rates and lowest fees in the financial services sector.” -