Federal Reserve Chair Holds Interest Rates Steady at First Meeting

The Federal Open Market Committee voted unanimously last Wednesday to maintain its benchmark interest rate in a range of 3.5 percent to 3.75 percent at the first meeting under the current chair. The decision came after the chair succeeded the prior chair last month. The former chair remains on the board of governors and continues as one of the 12 voting members.

The committee lowered rates by 0.25 percentage points at each of its final three meetings in 2025. Inflation stood at 2.4 percent in February before rising to a three-year high of 4.2 percent in May amid energy price increases. Nine officials projected at least one rate increase this year in the quarterly economic outlook.

Eight projected rates will stay steady through 2026, while one projected a single cut.

A senior administration official said the chair is not seeking advice from the White House on monetary policy decisions. The official described the two as longtime acquaintances who discuss topics but do not address interest-rate choices. The chair stated after the vote that the central bank will reduce reliance on its own forecasts.

The chair was the only member who did not submit a projection for rate moves this year.