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Fed holds rates steady, warns no quick fix for high US prices

Rates were kept in a 3.5% to 3.75% range for the fifth straight meeting, with policymakers split 9-3 on holding and citing elevated inflation linked partly to energy costs.

Reported · Written up by our desk · Central Banks

The Federal Reserve held US interest rates steady for a fifth straight meeting, leaving them between 3.5% and 3.75%, while warning there is no quick solution to easing Americans’ cost of living. BBC Business reports Fed Chair Kevin Warsh said inflation reduction would take time even as households and businesses express impatience about still-high prices.

The Fed maintained its pledge to bring inflation down but acknowledged inflation remains elevated, attributing part of it to rising energy prices. It also noted US economic activity was expanding at a solid pace despite uncertainty tied to the ongoing conflict in the Middle East.

Policymakers voted 9-3 to keep rates unchanged, with three members voting against the decision and backing a small hike. Warsh said rate changes are a tool to slow price growth by increasing borrowing costs for items such as mortgages, loans, and credit cards.

The decision also came amid concerns that geopolitical risk could push up oil and consumer prices, with Brent crude rising more than 6% to above $89 a barrel during Wednesday’s session. BBC Business notes inflation had fallen to 3.5% in the year to June, but prices were still rising faster than the Fed’s 2% target.

Latest closeWTI crude $81.23 ▼1.7%|Brent $85.92 ▼2.8%

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