Fed holds rates steady, signals possible future increase
12 reported
The Federal Reserve held its benchmark interest rate steady on Wednesday and indicated its next move could be a rate increase, according to a report from NPR. New Fed Chairman Kevin Warsh, speaking to reporters for the first time since taking over, vowed to bring inflation under control. President Trump chose Warsh for the job in hopes he would slash interest rates, but a wartime spike in energy prices has pushed inflation above 4%, making rate cuts unlikely. Fed policymakers signaled their next move is likely to be a rate increase, a message that caused the Dow Jones Industrial Average to fall more than 500 points. Warsh said the Fed’s commitment to deliver on inflation is “strong, unanimous and unambiguous.” The Fed fights inflation by raising interest rates, but the report notes that does little to address a supply shock caused by the war with Iran, which has snarled oil tanker traffic on the Strait of Hormuz. A tentative ceasefire may provide some relief, but energy analysts say it could take months to repair damage and bring prices back to pre-war levels. Warsh is appointing task forces to review Fed communications, inflation tracking, and responses to innovations like artificial intelligence, with recommendations expected by year’s end.
What’s reported
The Federal Reserve held its benchmark interest rate steady on Wednesday.
Fed policymakers signaled their next move is likely to be a rate increase.
New Fed Chairman Kevin Warsh spoke to reporters for the first time since taking over.
President Trump chose Warsh for the job in hopes he would slash interest rates.
A wartime spike in energy prices has pushed inflation above 4%.
The Dow Jones Industrial Average fell more than 500 points on the day of the announcement.
Warsh said the Fed’s commitment to deliver on inflation is “strong, unanimous and unambiguous.”
The war with Iran has snarled oil tanker traffic on the Strait of Hormuz.
A tentative ceasefire in the war may provide some relief, but energy analysts say it could take months to repair damage and bring prices back to pre-war levels.
Updated forecasts released yesterday point to a quarter-point increase in interest rates this year, instead of a previously expected quarter-point cut.
Warsh is appointing task forces to review Fed communications, inflation tracking, and responses to innovations like artificial intelligence.
The task forces are expected to make recommendations by the end of the year.
Key figures
Kevin Warsh, Chairman of the Federal Reserve
President Trump
Scott Horsley, NPR reporter
Sources: NPR
