Warsh Chairs First FOMC Meeting As Fed Holds Rates Steady
By CU Today Staff —
WASHINGTON—The Federal Reserve left interest rates unchanged Wednesday in the first Federal Open Market Committee meeting chaired by Kevin Warsh, maintaining the target range for the federal funds rate at 3.50% to 3.75% in a unanimous 12-0 vote.
In its policy statement, the FOMC said economic activity continues to expand at a solid pace despite elevated uncertainty tied in part to the conflict in the Middle East. The committee pointed to strong productivity growth and capital investment, while noting job gains have kept pace with workforce growth and the unemployment rate has remained relatively stable.
The Fed said inflation remains above its 2% target, citing supply shocks that have pushed prices higher in certain sectors, including energy. The statement underscored the central bank's commitment to restoring price stability, declaring that the committee "will deliver price stability."
The committee also reaffirmed its policy of maintaining ample reserves in the banking system.
"The FOMC opted for a 'hawkish hold' in June, making no changes to the fed funds rate target but emphasizing concerns about inflation," stated America's Credit Unions' Chief Economist Curt Long. "New Chair Warsh has long been a critic of FOMC communications and its use of forward guidance, and the committee’s June statement was significantly shorter and less detailed than usual. The FOMC’s economic projections, or so-called ‘dot plot’, showed that half of committee participants expect a rate hike in 2026. An increase in interest rates is clearly defensible given the solid condition of the labor market and rising inflation, but that will pile more pressure on borrowers in the short run. More than ever, credit unions stand out as the most affordable source of credit in the marketplace."
Originally reported by CU Today.