Fed Keeps Interest Rate Unchanged Amid Inflation and Iran Tensions

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

The decision was reached with a 9-3 vote, marking the fifth straight meeting where the benchmark rate remained the same.

Fed Chair Kevin Warsh praised the dissenting votes as a 'good family fight', saying he had asked for one. The three Fed officials who voted 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.

Inflation has been above the central bank's 2% target for over five years, with prices driven up by factors such as President Donald Trump's tariffs on foreign goods and a surge in investment in data centers to power artificial intelligence.