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Fed keeps policy rate steady after Kevin Warsh’s second meeting

The FOMC vote was 9-3 to maintain the benchmark rate at 3.5% to 3.75%, with three regional presidents dissenting in favor of a quarter-point hike.

Reported · Written up by our desk · Central Banks

The Federal Reserve held interest rates steady at its second policy meeting under Chair Kevin Warsh, maintaining its benchmark rate in a 9-3 vote at between 3.5% and 3.75% for the fifth straight meeting, according to Commercial Observer.

Warsh said the Fed continues to face inflation risks linked to ongoing war in Iran and reiterated that the central bank does not have a “soft target” for inflation, while remaining committed to the 2% annual goal.

Three FOMC regional presidents, Beth M. Hammack of Cleveland, Neel Kashkari of Minneapolis, and Lorie K. Logan of Dallas, voted against the decision, preferring instead to implement a quarter-point rate hike.

Commercial Observer also reported that Warsh discussed whether traditional inflation measures such as the Consumer Price Index and the Producer Price Index should be reconsidered, pointing to CPI running 1.5 percentage points above the 2% target and PPI 3.5 percentage points above, and noting a task force will examine potential changes with findings expected later in the year.

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