US Fed Holds Rates Steady At 3.5-3.75%, Three Policymakers Push For Hike

The US Federal Reserve maintained its interest rate stance on July 29, keeping the federal funds rate unchanged in the target range of 3.5% to 3.75% for the fifth consecutive policy meeting.

The decision was largely expected by markets. The Fed had last adjusted rates in December 2025, when it reduced the benchmark rate by 25 basis points to the current range.

However, the latest meeting stood out due to an unusual split among policymakers. Three of the 12 members of the Federal Open Market Committee (FOMC) voted against the decision and supported a 25 basis point rate hike.

The dissenting members were the presidents of the Fed’s Cleveland, Dallas and Minneapolis regional banks.

This marked the first time since September 2016 that three Fed policymakers had disagreed with the majority view on the direction of interest rates.

The FOMC retained the same policy language used in its June meeting, while Fed Chair Kevin Warsh reiterated that controlling inflation remains a key priority. Inflation has remained above the central bank’s 2% target for nearly five years.

Analysts described the decision as a “hawkish hold”, suggesting that while rates remained unchanged, the possibility of future increases has not been ruled out.

Market participants are now closely watching whether internal pressure within the Fed could lead to a possible rate hike in September.

The Fed’s decision is unlikely to cause a major market reaction immediately, as investors had already priced in a pause. However, the stronger-than-expected disagreement among policymakers has highlighted uncertainty over the future path of monetary policy.