Fed Holds Steady on Interest Rate Despite Inflation Concerns

The Federal Reserve kept its key interest rate unchanged at around 3.6% despite high inflation and rising energy prices caused by the Iran war.

The 9-3 decision was made after two days of deliberations, marking the fifth consecutive meeting where the benchmark rate remained steady.

Dissenting in favor of a quarter-point interest rate hike were Beth Hammack, president of the Federal Reserve Bank of Cleveland; Neel Kashkari, president of the Minneapolis Fed; and Lorie Logan, president of the Dallas Fed.

Fed Chair Kevin Warsh praised the dissents as 'a good family fight,' saying he had asked for such a discussion. Despite Warsh's stance on inflation, which has been above the central bank's 2% target since early 2021, traders on Wall Street saw only a 33% chance of a rate hike Wednesday.