Back to today’s briefing

Story perspectives

Fed Holds Rates as Inflation Stays Above 2% Target

7/12/2026

46 6 Full Breakdown

Summary

Story summary

Federal Reserve kept its target rate at 3.5%-3.75% after the June 16-17 meeting.
Policymakers split, with nine of 18 favoring at least one hike this year.
CPI rose from 3.8% in April to 4.2% in May, above 2% goal.
SEP projects 4.3% unemployment for 2026-2027, 2.2% GDP growth and 3.6% PCE inflation, while June unemployment was 4.2%.
Home sales fell 2.4% to 4.09 million units, while price rose 1.8% to $440,600.

History

Historical Context

In 1979 President Carter appointed Paul Volcker as Fed chairman to fight 1970s inflation. Volcker lifted the federal funds rate to a 20% peak in June 1981, pulling inflation from a 14.8% March 1980 high down below 3% by 1983. The June 2024 decision to keep rates unchanged amid renewed price pressures echoes that tight-policy legacy.

1 of 2

Story summary

Federal Reserve kept its target rate at 3.5%-3.75% after the June 16-17 meeting.
Policymakers split, with nine of 18 favoring at least one hike this year.
CPI rose from 3.8% in April to 4.2% in May, above 2% goal.
SEP projects 4.3% unemployment for 2026-2027, 2.2% GDP growth and 3.6% PCE inflation, while June unemployment was 4.2%.
Home sales fell 2.4% to 4.09 million units, while price rose 1.8% to $440,600.

1 / 2