Fed Holds Rates at 3.50%-3.75%; 3 Officials Vote to Hike

The Federal Open Market Committee voted 9-3 on July 29, 2026 to keep the target federal funds rate at 3.50% to 3.75%. Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan each voted to raise the range by 25 basis points.

The FOMC’s statement described the economy as expanding, with job growth roughly keeping pace with the labor force and little change in the unemployment rate. The Committee said productivity growth and business investment remain solid. The statement noted inflation remains above the Fed’s 2% objective and cited supply shocks, including higher energy costs linked to the conflict in the Middle East, as a factor contributing to elevated price pressures.

The Board of Governors approved keeping the interest rate on reserve balances at 3.65% effective July 30 and left the primary credit rate at 3.75%. The FOMC directed the New York Fed’s Open Market Desk to continue standing overnight repurchase operations at 3.75% and overnight reverse repurchase operations at 3.50%, with a $160 billion daily cap per counterparty. The Desk will roll over Treasury holdings at auction and reinvest proceeds from maturing agency securities into Treasury bills.

For households and businesses, the decision means borrowing costs for mortgages, credit cards and commercial loans remain unchanged for now. The three officials who voted for a quarter-point increase recorded their preference in the official tally, and the Committee’s statement left open the possibility of future rate increases depending on incoming data.

U.S. equity markets were largely flat after the announcement and bitcoin traded near $64,000. Fed Chair Kevin Warsh presided over the meeting and is scheduled to address reporters at the post-meeting press conference.

The Fed has tightened policy over prior years in response to higher inflation since the pandemic period. In its statement, the Committee reiterated that inflation must move back toward 2% and that developments in energy markets related to the Middle East add uncertainty to the outlook.