In brief
In a 10‑2 decision, the Fed kept the federal funds rate unchanged at 3.75‑4.00% as it watches inflation and upcoming employment data with the 2026 midterms on the horizon. The committee highlighted strong economic activity and robust employment while noting inflation remains high, and Chair Kevin Warsh warned it could rise again. Market reaction was positive, with the Dow, S&P 500 and Nasdaq all rising modestly.
The U.S. Federal Reserve on Wednesday held its benchmark interest rate steady at the 3.75‑4.00 percent range, a decision reported by Xinhua and Yonhap, and arriving less than a week before the 2026 midterm elections.
The Federal Open Market Committee (FOMC) reached the 10‑2 vote, with ten members supporting the hold and two favoring a 25‑basis‑point hike, as noted by Xinhua. Yonhap confirmed the 10‑2 split and added that the Fed’s previous month’s 0.25‑percentage‑point hike set the stage for this pause.
Both outlets recounted the Fed’s statement that economic activity remains strong, with resilient domestic spending, solid productivity growth and steady job gains, while acknowledging that inflation is still elevated. They also highlighted the committee’s commitment to ample reserves and price stability, emphasizing that additional data will guide future moves toward the 2 % inflation goal.
Yoonhap quoted Fed Chair Kevin Warsh as saying inflation remains “too high” and that the Fed may raise rates later in the year. This warning was reported only by Yonhap and is not repeated by Xinhua.
Markets reacted positively to the pause, with U.S. stocks finishing higher. Xinhua reported gains for the Dow, S&P 500 and Nasdaq, noting that most S&P 500 sectors ended in positive territory, whereas utilities and real estate lagged. The record also noted that the Fed’s split decision signals potential for further rate hikes later this year.
In a statement, the Fed added that the banking system’s ample reserves will be maintained and that the evolving policy stance will be guided by the accumulation of new information to achieve timely inflation alignment with the 2 % target.
