Bankless · Friday, July 31, 2026
The Federal Reserve, under new Chair Kevin Warsh, decided to hold interest rates steady in his first FOMC meeting, despite a 9-3 split vote indicating internal disagreement. Warsh reiterated a firm commitment to a 2% inflation target, stating that interest rates could be adjusted upwards if inflation remains elevated, while also suggesting a potential reliance on balance sheet reduction for monetary policy.
“So it was a split 9-3 vote. So 9 voted to hold, 3 voted to raise, I think. Yes, raise. Yeah, so ended up holding rate steady at 3.5% to 3.75%.”
“Let me reiterate, he said, there is no soft inflation target. There is no soft implicit target, not on this committee's watch. There's only a target and it's 2%.”
“If inflation continues to be elevated through the forecast period, interest rates could well be part of the solution.”