\n<\/p>\n
The unusually divided Federal Reserve held its key interest rate steady on Wednesday as policymakers grappled with the policy impact of persistent inflation and awaited an imminent leadership change at the central bank.<\/p>\n
In probably Chairman Jerome Powell’s last meeting, the rate-setting Federal Open Market Committee voted to keep the benchmark funds rate in a range between 3.5%-3.75%. The market was pricing in a 100% probability of no change.<\/p>\n
However, the meeting took a dramatic turn amid a huge crowd of officials who resisted the message that rates could be cut further.<\/p>\n
Amid expectations for a regular vote to keep the benchmark funds rate steady, the Federal Open Market Committee was split along 8-4 lines, with officials expressing varying reasons for their votes.<\/p>\n
The last time four FOMC members dissented was in October 1992.<\/p>\n
Governor Stephen Miron, as he has done since joining the central bank in September 2025, dissented in favor of a quarter-percentage point cut.<\/p>\n<\/div>\n
The other three “no” votes came from regional chairs Beth Hammack of Cleveland, Neel Kashkari of Minneapolis and Lori Logan of Dallas. He said he agreed with the moratorium but “do not support including bias reduction in the statement at this time.”<\/p>\n
At issue for all three was this sentence: “When considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the emerging outlook, and the balance of risks.”<\/p>\n
The phrase indicates the likelihood that the next move will be lower, meaning the word “additional” indicates that the most recent rate action has been cut. Hammack, Kashkari and Logan, as well as many other Fed officials, have consistently warned about the dangers of persistent inflation. Higher prices signal higher rates for the Fed, which is taking an accommodative stance through the latter half of 2025.<\/p>\n<\/div>\n