The Federal Reserve Holds Interest Rate at 3.75%

The Federal Reserve Holds Interest Rate at 3.75% as expected, with the Federal Open Market Committee unanimous in their decision to keep rates steady. Some key takeaways from Kevin Walsh first meeting as Chairman of the federal reserve:

• The FOMC voted unanimously to keep its benchmark overnight borrowing rate unchanged in a range of 3.5%-3.75%

• Fed officials, through their closely watched “dot plot” grid, removed their prior outlook for a rate cut this year and indicated that a hike is possible.

• Speaking in a press conference following the FOMC meeting, Chairman Warsh said the policy statement refrained from providing so-called forward guidance because it is not "well suited" to the current economic moment.

• Recent inflation indicators have posted multiyear highs, with the consumer price index (CPI) for May indicating a 4.2% annual inflation rate,

• The outlook for inflation for the end of 2026 was marked up to 3.6% from 2.7%, before it is seen falling to 2.3% next year.

• Economic growth was marked down slightly, with the unemployment rate expected to end the year at 4.4%, the same as in the Fed's March projections.

• Warsh and the FOMC are committed to reducing inflation to 2%. They will continue to monitor economic data to inform their decisions.

The next FOMC rate decision will be July 29th