Fed Holds Interest Rates as Inflation Fight Continues

US Federal Reserve Chair Kevin Warsh emphasized that the central bank's decision to leave interest rates unchanged is not a pause in its fight against inflation. The Fed voted 9-3 to keep the federal funds rate target range between 3.5% and 3.75%, with three dissenting votes.

Warsh described the meeting as a 'rigorous review of the economic situation,' focused on major unresolved questions and the work officials must complete before deciding next steps. He stressed that policymakers remain prepared to act and are committed to returning inflation to the Fed's 2% target after more than five years of above-target price increases.

Warsh pointed out that the decision not to alter rates was 'the beginning of the story, not the end of the story,' and characterized the approach as 'watchful thinking, not watchful waiting.' He noted that the committee did not place significant weight on the latest core inflation reading when deciding to hold rates.