Fed Holds Rates Steady in 8-4 Vote as Powell Exits Chair Role

The Federal Reserve held its benchmark interest rate steady at 3.5 to 3.75 percent on Wednesday, marking the third consecutive meeting without a change, as policymakers cited elevated inflation driven by rising global energy prices and uncertainty from developments in the Middle East.

The decision by the Federal Open Market Committee came in an 8-4 vote, the most divided since October 1992. Fed Governor Stephen Miran dissented in favor of a quarter-percentage-point cut. Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan supported keeping rates unchanged but opposed language in the policy statement suggesting an easing bias, specifically the reference to assessing the "extent and timing of additional adjustments" to the rate.

The committee's statement noted that "inflation is elevated, in part reflecting the recent increase in global energy prices," and that "developments in the Middle East are contributing to a high level of uncertainty about the economic outlook." Oil prices have surged above $100 per barrel amid the ongoing U.S.-Israeli conflict with Iran, complicating the Fed's efforts to determine whether the...