Story perspectives

Fed Holds Rates Steady Amid Inflation Concerns

2/19/2026

Summary

Story summary

The Federal Reserve kept the federal funds rate at 3.5% to 3.75% at its January 2025 meeting, citing inflation above the 2% target.
Most policymakers supported the pause.
Some signaled rate hikes if inflation stays high and others favored cuts if inflation falls.
Dissenting votes came from Governors Christopher Waller and Stephen Miran over labor-market concerns.
The next Fed meeting is March 17–18, 2025, when projections will be discussed.

History

Historical Context

In response to the 2008 financial crisis, the Federal Reserve slashed the federal funds rate from 5.25% to near zero by December 2008, marking a historic shift in monetary policy. This unprecedented move aimed to stimulate a struggling economy with a 4.1% unemployment rate and declining GDP. Today, maintaining rates between 3.5% and 3.75% reflects ongoing inflation concerns, highlighting the Fed's ongoing challenge of balancing economic recovery and price stability.

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Story summary

The Federal Reserve kept the federal funds rate at 3.5% to 3.75% at its January 2025 meeting, citing inflation above the 2% target.
Most policymakers supported the pause.
Some signaled rate hikes if inflation stays high and others favored cuts if inflation falls.
Dissenting votes came from Governors Christopher Waller and Stephen Miran over labor-market concerns.
The next Fed meeting is March 17–18, 2025, when projections will be discussed.

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