The US Federal Reserve left interest rates unchanged on Wednesday, holding its benchmark rate within the 3.50% to 3.75% range despite internal pressure from a minority of policymakers who wanted to tighten further.
Three of the 12 voting members of the Federal Open Market Committee dissented, preferring a quarter-point rise. The remaining nine backed the hold.
In its statement, the Fed said inflation remains relatively elevated against its 2% target, partly reflecting supply-side shocks in certain sectors including energy. Unemployment, it added, has shown little meaningful change.
The committee described economic activity as continuing to grow at a moderate pace, with the labour market remaining solid, while noting that uncertainty around the economic outlook stays high. Future policy decisions, it said, will depend on incoming data and an assessment of inflation trends, labour market conditions, and broader economic risks.
Kevin Warsh, the Fed’s newly appointed chair, denied that he was hesitant to act on rising prices, pushing back against any suggestion that the hold signals reluctance to tighten if conditions warrant it.
