Federal Reserve Holds Rates Steady Amid Inflation Uncertainty

The Federal Open Market Committee voted 11-1 to keep the federal funds rate at 4.25-4.50%, pausing its easing cycle for the third consecutive meeting. Chair Jerome Powell cited elevated uncertainty from new tariff policies and a labor market that remains surprisingly resilient. The lone dissenter, Governor Adriana Kugler, favored a quarter-point cut.

Markets had priced in a hold heading into the meeting, and the reaction was muted. The 10-year Treasury yield ticked up three basis points to 4.41%. Powell emphasized data dependence, and the committee's dot plot now shows just one cut expected before year-end.