Fed Holds Rates Unchanged, Powell Stays Through 2026

What happened

The Federal Reserve kept interest rates unchanged in a range of 3.5% to 3.75%, with an 11-1 vote. The Fed projects only one rate cut in 2026, citing uncertain impacts from ongoing conflicts and higher inflation concerns. Jerome Powell announced he will remain as Fed chair through the confirmation process for his potential successor.

Why people care

Interest rate decisions directly affect mortgage rates, credit card rates, and borrowing fall-as-energy-costs-surge-again-the-opening-trade-3192.html" class="story-link" title="Iran War: European Stocks Fall as Energy Costs Surge Again | The Opening Trade 3">costs for millions of Americans. The Fed's cautious approach signals continued concern about inflation, which has proven more persistent than many economists expected.

The takes

Market watchers say

The Fed's decision to hold rates and project minimal cuts reflects appropriate caution given persistent inflation pressures. Powell's commitment to staying through the transition provides stability during uncertain economic times.

Economic critics say

The Fed is being overly hawkish when job creation has stalled and workers are struggling with high borrowing costs. Keeping rates elevated while employment growth slows risks pushing the economy into unnecessary hardship.

Sources

Powell: Job creation is near zero
r/antiwork
Powell staying thru investigation 🖕🏻 per Bloomberg
r/wallstreetbets
Powell says he will stay on as head of the Fed until Warsh is confirmed
r/wallstreetbets
Fed leaves rates unchanged, sticks with single cut in 2026 despite higher inflation
r/news
Fed Leaves Rates Unchanged, Projects One Cut in 2026
Bloomberg
Fed Cites Uncertain War Impact as It Leaves Rates Unchanged
Bloomberg

Fed Cites Uncertain War Impact as It Leaves Rates Unchanged