WASHINGTON (VVNG.com) — The Federal Reserve on Wednesday voted to leave its benchmark interest rate unchanged, keeping the federal funds target range at 3.5% to 3.75%, while emphasizing that inflation remains above its 2% target despite continued economic growth.
The decision was approved by a 9-3 vote of the Federal Open Market Committee (FOMC), according to the Federal Reserve’s July 29, 2026, statement. Three policymakers — Beth M. Hammack, Neel Kashkari, and Lorie K. Logan— dissented, preferring to raise rates by one-quarter percentage point.
In its statement, the committee said it maintained the current target range “in support of the Federal Reserve’s dual mandate” of promoting maximum employment and stable prices.
The Fed said the U.S. economy continues to expand at a solid pace despite ongoing uncertainty.
“Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East,” the committee stated.
Officials also noted that productivity growth and business investment remain strong, while the labor market has stayed resilient.
“Job gains have kept pace with the workforce, and the unemployment rate has changed little,” the statement said.
Despite those positive indicators, inflation continues to run above the central bank’s long-term goal.
“Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy,” the statement said. “The Committee will deliver price stability.”
As part of its policy implementation, the Federal Reserve Board unanimously voted to maintain the interest rate paid on reserve balances at 3.65%, effective July 30, 2026.
The FOMC also directed the Federal Reserve Bank of New York’s Open Market Desk to continue conducting operations necessary to keep the federal funds rate within the target range. Those operations include overnight repurchase agreements at 3.75%, overnight reverse repurchase agreements at 3.5%, and purchases of Treasury securities as needed to maintain ample reserves in the banking system.
Additionally, the Federal Reserve Board unanimously approved keeping the primary credit rate unchanged at 3.75%.
The Federal Reserve said it will update operational details as appropriate following future decisions by the Federal Open Market Committee or the Board of Governors.
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