What you need to know
- The FOMC voted 9-3 on 29 July 2026 to hold the federal funds rate at 3.5-3.75 per cent.
- Beth Hammack, Neel Kashkari and Lorie Logan dissented, each favouring a quarter-point increase.
- It was the fifth consecutive meeting without a change to the target range.
- The Board held interest on reserve balances at 3.65 per cent, effective 30 July.
- The next scheduled FOMC meeting is 15-16 September 2026.
The US Federal Reserve left its benchmark interest rate unchanged at a target range of 3.5 to 3.75 per cent on 29 July, with three of the committee’s voting members dissenting in favour of a quarter-point increase. It was the fifth consecutive meeting at which the rate was held.
The Federal Open Market Committee approved the decision by a 9-3 vote, releasing its statement at 2pm Eastern time. Beth Hammack of Cleveland, Neel Kashkari of Minneapolis and Lorie Logan of Dallas each preferred a quarter-point rise.
What did the Fed say about the economy?
The committee described economic activity as expanding at a solid pace despite elevated uncertainty, which it attributed in part to the conflict in the Middle East. It said job gains had kept pace with the workforce and that the unemployment rate had changed little.
On prices, the statement said inflation remained elevated relative to the committee’s 2 per cent goal, reflecting in part supply shocks affecting certain sectors.
Why did the Fed hold rates in July 2026?
At its meeting on 28-29 July 2026, the US Federal Open Market Committee voted 9-3 to leave the federal funds rate target range unchanged at 3.5 to 3.75 per cent, the fifth consecutive meeting without a change. The three dissenting votes came from regional Federal Reserve bank presidents Beth Hammack of Cleveland, Neel Kashkari of Minneapolis and Lorie Logan of Dallas, each of whom favoured raising the range by a quarter of a percentage point. The committee said economic activity was expanding at a solid pace, that job gains had kept pace with the workforce, and that inflation remained above its 2 per cent target, partly because of supply shocks. The Board of Governors separately held the interest rate on reserve balances at 3.65 per cent, effective 30 July 2026. The committee’s next scheduled meeting is 15-16 September 2026.
What were the technical settings?
| Setting | Rate |
|---|---|
| Federal funds target range | 3.50% to 3.75% |
| Interest on reserve balances | 3.65% |
| Standing overnight repo | 3.75% |
| Overnight reverse repo (offering rate) | 3.50% |
The Board of Governors voted unanimously to hold the interest rate on reserve balances at 3.65 per cent, effective 30 July. The overnight reverse repurchase facility carried a per-counterparty limit of $160 billion a day.
How did markets react?
Equities fell. CNBC reported the S&P 500 down 0.6 per cent and the Nasdaq Composite off 0.5 per cent in late-afternoon trading, with the Dow Jones Industrial Average lower by more than 840 points, or 1.6 per cent.
Bonds were mixed. The 10-year Treasury yield rose five basis points to 4.657 per cent and the 30-year gained more than nine basis points to 5.193 per cent, while the two-year fell four basis points to 4.236 per cent.
Asked about the split, Warsh said the divergence was by design. “I asked for a good family fight, and I got one,” he told reporters.
What comes next?
The FOMC’s next scheduled meeting is 15-16 September. Warsh is due to speak at the Jackson Hole symposium in Wyoming from 27 to 29 August, which markets will watch for signals on the policy path. June projections showed most officials expecting the rate to end 2026 between 3.6 and 4.1 per cent.
Related coverage
Sources for this report
The Redline News Desk
The Redline News desk files and edits world reporting. Every story carries the sources it was built from, and corrections are published on the story itself.
Leave a Reply