Story perspectives

Fed Holds Rates at 3.5%–3.75% Despite Inflation Concerns

8/19/2026

Summary

Story summary

The Federal Open Market Committee met July 28-29 and voted 9-3 to keep the federal funds rate at 3.5 %-3.75 %.
Officials noted many participants said inflation risks were skewed upward and Dallas Fed President Lorie Logan, Cleveland Fed President Beth Hammack, and Minneapolis Fed President Neel Kashkari dissented, favoring a 0.25-point increase.
The Treasury Department announced it would double longer-term debt repurchases, cutting the 30-year Treasury yield from 5.26 % to 5.18 %.

History

Historical Context

Facing double-digit inflation that hit 13.5% in 1980 after the 1979-80 oil shocks, newly appointed Fed chair Paul Volcker lifted the federal-funds rate to a 20% peak in June 1981, triggering the early-1980s recession. The policy cut CPI growth to about 3% by 1983 and set a precedent for today’s Treasury decision to double long-term debt repurchases to curb 30-year yields.

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Story summary

The Federal Open Market Committee met July 28-29 and voted 9-3 to keep the federal funds rate at 3.5 %-3.75 %.
Officials noted many participants said inflation risks were skewed upward and Dallas Fed President Lorie Logan, Cleveland Fed President Beth Hammack, and Minneapolis Fed President Neel Kashkari dissented, favoring a 0.25-point increase.
The Treasury Department announced it would double longer-term debt repurchases, cutting the 30-year Treasury yield from 5.26 % to 5.18 %.

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