Fed holds rates steady for first time since July

Subscribe to enjoy similar stories. WASHINGTON—The Federal Reserve entered a new holding pattern on interest rates Wednesday and offered little clarity on when cuts might resume after contentious reductions at officials’ three previous meetings. The decision to hold the benchmark federal-funds rate steady in a range between 3.5% and 3.75% was approved on a 10-2 vote.

Officials made fairly modest changes to the post-meeting statement explaining their decision, retaining language that has typically signaled openness to further moves without committing to a timeline. The Fed has navigated between competing risks for months. Inflation slowed in 2023 and 2024 but then stalled out above the central bank’s 2% goal over the past year, arguing for patience.

Meanwhile, concerns over a cooling labor market prompted last year’s three cuts. Two Fed governors—both appointed by President Trump—dissented against the decision and favored a quarter-point rate cut. The Fed’s 12-person rate-setting committee includes seven presidentially-appointed governors and five regional bank presidents who aren’t political appointees.

The decision followed an interval of political pressure from the White House. The Justice Department this month opened a criminal investigation into Fed Chair Jerome Powell, who disclosed the probe in a video statement casting it as a pretext to advance Trump’s desire for lower interest rates. Powell’s term as chair ends in May, and Trump’s advisers have said he is close to naming a successor.

Governor Christopher Waller, one of four finalists, opposed Wednesday’s decision. Analysts had said casting a dissenting vote may have been a precondition for keeping his long-shot candidacy viable. Governor Stephen Miran also