The Federal Reserve decided to hold interest rates steady on July 29, 2026, a move that triggered sharp reactions across financial markets.
Chairman Kevin Warsh confirmed the decision and signaled a shift toward less forward guidance for investors.
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The benchmark federal funds rate remains unchanged, following a 9-3 vote by the central bank's policy committee.
The decision led to a sharp decline in stock indices, with the Dow experiencing its worst trading day in 15 months.
Meanwhile, 30-year US Treasury yields climbed to 19-year highs.
Warsh Defends Policy Framework
Addressing the central bank's communication strategy and long-term economic objectives, Warsh defended the policy framework during a press conference in Washington, D.
C. He emphasized the Fed's commitment to achieving its inflation target.
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"We will deliver the 2% inflation target," said Kevin Warsh, Chairman of the Federal Reserve.
Warsh also stressed that the Fed intends to evaluate its ongoing strategy based on tangible outcomes rather than market expectations.
"We're going to be judged by how we perform, and that's what we intend to do," he added.
Despite holding rates steady between 3.5% and 3.75%, three dissenting committee members voted in favor of a rate increase.
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According to CME Group's FedWatch tool, there is a 60% probability of a rate hike at the upcoming September meeting.
