Fed holds rates steady as three officials vote to hike

The Federal Reserve left its benchmark interest rate unchanged on Wednesday in a 93 vote, keeping the federal funds rate in a range of 3.5% to 3.75%. The decision showed a sharper divide inside the central bank, with three regional presidents — Beth Hammack of Cleveland, Neel Kashkari of Minneapolis and Lorie Logan of Dallas — dissenting in favor of a quarterpoint increase. They pointed to inflation that has stayed above the Fed's 2% target for more than five years. The statement after the meeting was shorter than in previous months and gave few clues about the next move, reflecting Chair Kevin Warsh's preference for less forward guidance. Markets had mostly expected another hold, though some traders had priced in a chance of a surprise hike. The vote came as officials continued to weigh persistent price pressures, tariffs, energy costs and uncertainty tied to conflict in the Middle East. The Fed also said economic activity remains solid and that labor market conditions have changed little.