The Fed's rate-setting committee reached the 9-3 decision after two days of deliberations, marking the fifth straight meeting at which it kept its benchmark rate at around 3.6%. Dissenting from the majority in favor of a quarter-point interest rate hike were Beth Hammack, president of the Federal Reserve Bank of Cleveland; Neel Kashkari, president of the Minneapolis Fed; and Lorie Logan, president of the Dallas Fed.
Inflation has been stuck above the central bank's 2% target for more than five years. The Iran war has generated uncertainty over the economic outlook and has driven energy prices higher, intensifying inflationary pressure and creating a quandary for Fed policymakers. Hammack, Kashkari and Logan had previously called for or signaled that they would be open to raising rates to combat high prices. Most Wall Street traders expect the Fed to hike rates at its next meeting in mid-September.
New Fed Chair Kevin Warsh, presiding over his second meeting of the central bank's rate-setting committee, has declared that he has "no tolerance'' for elevated inflation. He was appointed by President Donald Trump, who has put intense pressure on the Fed to cut rates instead of raising them.
