The US Federal Reserve has decided to keep its benchmark interest rate unchanged amid pressure from war-driven inflation increases, even though the latest month showed some slowdown.
On Wednesday, 29 Jul 2026 GMT+7, the Federal Open Market Committee (FOMC) of the US Federal Reserve voted non-unanimously to maintain the benchmark interest rate at 3.50–3.75%, marking the fifth consecutive decision to hold rates steady.
Of the nine FOMC members, six supported holding rates steady, while three dissented, voting to raise rates by 0.25%. This notable dissent occurred under the leadership of the new Federal Reserve Chair, Mr. Kevin Warsh.
The main reason for the committee's decision to hold rates was the sharp acceleration of inflation since March, driven by the “Iran war” initiated by President Donald Trump, which rapidly increased global prices of oil, energy, and fertilizer before affecting other product prices.
Although consumer inflation slowed to 3.5% year-over-year in June, it remains above the Fed's long-term target of 2%—a level it has exceeded for over five years—and may rise further due to escalating conflicts in the Middle East in recent weeks.
However, several Fed members indicated that their patience with inflation issues is wearing thin, even though the latest inflation figures have given the Fed a “breather” to hold interest rates for now.
Analysts note that inflation erodes the economy, particularly hurting low-income households the most, and the Fed may need to raise interest rates at least twice more this year if inflation does not trend back toward the 2% target.
Follow international news:https://www.thairath.co.th/news/foreign
Source:cna