Fed keeps rates unchanged as officials debate inflation

The Federal Reserve held its benchmark interest rate at 3.5% to 3.75% on Wednesday, even as several officials signaled they would prefer tighter policy if inflation remains elevated. In his postmeeting remarks, Chair Kevin Warsh said the central bank will not offer detailed guidance on future decisions, but he stressed that it will act if needed to keep inflation on track toward its 2% goal. Three policymakers dissented in favor of a rate hike, marking the most dissents on a rate decision since 2016. Markets reacted negatively after the decision and press conference, with major U.S. stock indexes falling and Treasury yields moving higher at the long end. Economists and investors said the next inflation reports, along with developments in the Middle East and energy prices, are likely to shape the Fed’s next move later this year.