Fed Holds Rates Unchanged Amid Divided Officials and Persistent Inflation

The US Federal Reserve kept interest rates unchanged for a fifth consecutive meeting, despite President Donald Trump's calls for lower borrowing costs. The rate-setting committee voted 9-3 to maintain the federal funds rate at around 3.6 per cent after two days of deliberations. Three officials dissented, backing a rate hike due to inflation remaining above the Fed's 2 per cent target.

At a press conference, Federal Reserve Chair Kevin Warsh emphasized that the central bank remains committed to bringing down inflation but acknowledged there is no 'magic wand' to achieve this in a short timeframe. Trump expressed his support for Warsh and stated he would love to see lower interest rates but is constrained by the Fed's independence.

Some economists had expected the Fed to raise rates, which could have been seen as positive for consumers. However, relief may be limited, given that credit card rates remain near 20 per cent and mortgage rates are at their highest since last August.