Fed holds interest rates steady as economy weathers resurgent inflation
The Iran war set off resurgent inflation amid on-again, off-again fighting.
ByMax Zahn
July 29, 2026, 1:57 PM
The Federal Reserve held interest rates steady on Wednesday as the economy weathers resurgent inflation set off by the Iran war.
The policy decision arrived as oil prices surged and stock prices tumbled in response to a resumption of fighting in the Middle East, underscoring the challenge faced by central bankers tasked with containing price increases.
Fed Chair Kevin Warsh, who took the helm of the central bank in May, has repeatedly vowed to slash inflation to the Fed's desired level of 2%. The annual pace of price increases currently registers at 3.5%.
"The committee remains resolute -- you’ve heard this before -- that we will deliver price stability," Warsh told reporters in Washington, D.C., on Wednesday.
Warsh insisted the central bank would dial back price increases despite years of inflation above the Fed's target level.
"Some households, businesses and market professionals after five years of high inflation have been left with a mistaken impression that’s hard to shake: That the Fed's implicit inflation target was somehow above 2%," Warsh said.
"Let me reiterate: There is no soft inflation target," Warsh added. "There is only a target and it’s 2%."
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https://abcnews.com/Business/fed-issue-interest-rate-decision-gas-prices-rise/story?id=135130446
