Federal Reserve holds federal funds rate steady at 3.5% to 3.75%
Key Takeaways
- •The FOMC kept the federal funds target range at 3.5% to 3.75% in a 9-3 vote.
- •Economic activity was described as expanding at a solid pace despite elevated uncertainty tied in part to the conflict in the Middle East.
- •Inflation remained above the Federal Reserve’s 2% objective, with supply shocks and energy-related price increases cited as contributing factors.
- •Beth M. Hammack, Neel Kashkari, and Lorie K. Logan voted against the decision and preferred a quarter-point increase.
The Federal Open Market Committee (FOMC) approved the following statement for release by a 9-3 vote on July 29, 2026.
The Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent, in support of the Federal Reserve's dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.
Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little. The decision leaves the benchmark rate unchanged even as policymakers continue to balance inflation risks against signs of resilience in the labor market and broader economy.
Inflation remains elevated relative to the Committee's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability. With the federal funds rate serving as the Fed's main policy tool, the statement keeps attention on incoming data that could shape the pace of future adjustments.
Voting against the monetary policy action were Beth M. Hammack, Neel Kashkari, and Lorie K. Logan, who preferred to raise the target range for the federal funds rate by 1/4 percentage point at this meeting.