Fed Keeps Rates Unchanged Amid Inflation Debate

The US Federal Reserve's monetary policy committee (FOMC) kept interest rates unchanged at 3.5-3.75 per cent after a 9-3 vote, with three members dissenting in favour of a 25-basis-point increase.

Inflation remains a concern for the Fed, with most participants expecting it to decline over the rest of 2026 but still worrying about potential persistence due to factors like tariffs and energy price increases.

The minutes highlighted a debate among policymakers over the need for tighter policy, with several supporting a 25-basis-point hike to prevent sharper tightening later on. Many participants also said policy tightening would be necessary if inflation didn't decline.