The Federal Open Market Committee once again voted to maintain the target range of the federal funds rate at 3.5%-3.75%, but three members voted against the action, instead preferring to raise the rate.
The FOMC last adjusted the federal funds rate in December 2025, when the committee voted to lower the rate by 25 basis points to its current range. In a statement issued after today’s decision, the committee said 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,” the FOMC said. “Job gains have kept pace with the workforce, and the unemployment rate has changed little.”
Fed Presidents Beth Hammack, Neel Kashkari and Lorie Logan voted against the policy action. They instead preferred to raise the rate by 25 basis points.
Warsh: No soft target
In a press conference, Fed Chairman Kevin Warsh said the U.S. economy has shown “impressive resilience” despite recent shocks. He also once again stressed the Fed’s commitment to reach its 2% inflation target.
“For some households, businesses and market professionals, five years of high inflation has 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%.”
