world-economy

Fed Stays Course on Rates as Three Officials Seek Tightening

The Federal Reserve held its benchmark interest rate unchanged Wednesday, but a 9-3 split revealed growing pressure within the central bank over persistent inflation. Regional presidents Beth Hammack, Neel Kashkari and Lorie Logan dissented, advocating for a quarter-point increase to combat inflation exceeding the Fed's 2% target for over five years. The dissenting votes challenge Chairman Kevin Warsh's leadership approach, which emphasizes policy conditions over forward guidance. The central bank's post-meeting statement largely mirrored June's language, noting solid economic expansion and steady job growth amid elevated Middle East-related uncertainty. Markets had assigned roughly a one-in-three probability to a surprise rate increase, though most anticipated another pause. The Fed cut rates three times in late 2025 before pausing this year.