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5d ago

Fed Holds Rates at 3.50%–3.75% as Pressure Builds for More Tightening

Markets now see a likely September rate hike after bond yields jumped following the Fed's July 29 pause.

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U.S. Federal Reserve Chairman Kevin Warsh holds a press conference following a two-day meeting of the Federal Open Market Committee (FOMC), as the Federal Reserve holds interest rates steady, at the Federal Reserve, in Washington, D.C., U.S. July 29, 2026.
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Via exchangerates.org.uk

Overview

  • The Federal Open Market Committee voted 9-3 to keep the federal funds rate at 3.50%–3.75% after its July 29 meeting.
  • Three regional presidents — Beth Hammack, Neel Kashkari and Lorie Logan — dissented and publicly argued for a 25 basis-point increase to curb persistent inflation.
  • Long-term Treasury yields rose to multi-year highs and stocks fell, and traders now place better than a 60% chance on a September quarter-point hike according to CME FedWatch.
  • Chair Kevin Warsh reaffirmed the Fed's 2% inflation goal, removed routine forward guidance, and has assembled outside experts to review Fed communication and the inflation framework.
  • Officials say if inflation stays above target, higher rates are likely which would raise borrowing costs for households and businesses and could slow hiring and spending.