Fed holds rates steady in July as three officials favor quarter-point increase

FOMC Statement: As anticipated, the Federal Open Market Committee maintained its interest rate target range at 3.50%­–3.75% at its July meeting. The FOMC made no change to the contents of its statement. Moreover, the statement continued to cite productivity growth and capital investment gains as well as strong job gains and elevated inflation, attributable to supply shocks in industries including energy. Furthermore, three FOMC members—Beth Hammack, Neel Kashkari and Lorie Logan—supported raising the target rate by 0.25%. The three dissents in July follow a unanimous decision at its June meeting.

In the press conference following the meeting, Federal Reserve Chairman Kevin Warsh reaffirmed the committee’s goal of price stability after years of elevated inflation. Furthermore, the chairman highlighted higher yields for treasuries noting that limited forward guidance was part of the change. At the same time, he cited high spending on capital expenditures, noting the possibility of future manufacturing growth as a result.

The FOMC’s summary of economic projections, which maps out the Federal Reserve’s expectations for where interest rates may be headed in the future, generally is released in conjunction with every other FOMC meeting. Since the June meeting included a release of economic projections, there was not a release in conjunction with the July FOMC meeting. The June summary signaled a more hawkish stance regarding where monetary policy should go for the rest of the year. Nine Federal Reserve officials projected a rate hike by the end of the year, eight anticipated no change in rates and one member projected a rate cut. Furthermore, the projections show that officials still expect inflation to remain elevated, averaging 3.3% in 2026.