Fed Keeps Rates Steady Amid Inflation Fears and Rising Energy Prices

The Federal Reserve left its benchmark interest rate unchanged on July 29, opting to hold borrowing costs steady as inflation remained above its target and energy prices climbed in the wake of the Iran war.

The central bank's rate-setting committee voted 9-3 after a two-day meeting to keep the federal funds rate at about 3.6%, marking the fifth consecutive meeting without a change.

Federal Reserve Chair Kevin Warsh, presiding over his second meeting of the central bank's rate-setting committee, has declared that he has 'no tolerance'' for elevated inflation.

'For some households, businesses, and market professionals, five years of high inflation have left a mistaken impression that's hard to shake, that the Fed's implicit inflation target was somehow above 2%,' Warsh said. 'Let me reiterate: there is no soft inflation target. There is no soft implicit target. Not on this committee's watch. There's only a target and it's 2%.'

The Fed's next policy meeting is scheduled for September, when officials will again review inflation, employment, and other economic data before deciding whether additional policy changes are warranted.