Fed holds interest rates steady as Iran war and tariffs loom

The decision was largely expected by investors, who have seen markets begin to churn amid ongoing concerns about higher oil prices and AI spending.

The Federal Reserve left its key interest rate unchanged Wednesday for the fifth consecutive meeting, despite lingering concerns about inflation that continues to pressure U.S. household finances.

The decision was largely expected by investors, who have seen markets begin to churn amid ongoing concerns about higher oil prices stemming from the war with Iran and AI spending worries.

Nine members of the Federal Open Market Committee voted to keep rates steady at 3.5% to 3.75%. But three policymakers saw the case for raising interest rates and chose to vote against the decision to stand pat. It was the first time since 2016 that there were three dissents in the same direction over a policy change.

The vote split reveals a growing internal divide over whether the central bank is moving too slowly to tamp down on inflation.

In remarks following Wednesday’s announcement, Federal Reserve Chair Kevin Warsh reiterated the central bank’s commitment to its inflation goal.