Fed holds interest rates steady despite Trump’s renewed calls to lower them

Kevin Warsh, the Federal Reserve chairman, holds a press conference, in Washington DC, on 17 June 2026. Photograph: Eric Lee/ReutersView image in fullscreenKevin Warsh, the Federal Reserve chairman, holds a press conference, in Washington DC, on 17 June 2026. Photograph: Eric Lee/ReutersFed holds interest rates steady despite Trump’s renewed calls to lower themRates remain unchanged for fifth time since December as tenuous Iran peace deal pushes energy prices up againThe US Federal Reserve held interest rates steady on Wednesday, leaving rates unchanged for the fifth time since December despite Donald Trump’s renewed calls to lower rates.

Cooler inflation data published earlier this month eased expectations for an imminent rate hike. But the tenuous peace deal between the US and Iran have made energy prices creep up again, strengthening the case for an increase. The Fed’s federal open market committee voted 9-3 to maintain rates, with three dissenting members who preferred to raise the rate by a quarter-percentage point.

At the Fed’s June meeting – its first under new chair, Kevin Warsh – half of the central bank’s 18 members predicted at least one rate hike by the end of the year. Interest rates currently sit at a range of 3.5% to 3.

75%.“Inflation remains elevated relative to the Committee’s 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy,” the Fed’s open market committee said in its statement, which is once again noticeably shorter after Warsh’s recent calls for more streamlined communication.Warsh has signaled he is ushering in a new era at the central bank, one that emphasizes a reservedness toward forward guidance.

At his first meeting in June, he announced five new task forces – comprised of economics professors, business leaders and former central bank governors – that are meant to rethink how the Fed approaches its communications, data, balance sheet policy, inflation framework and the impact of artificial intelligence on its policy judgments.The US-Israel war with Iran, which has endured since the end of February, has pushed energy prices higher for American households and businesses, a pressure that Warsh has openly acknowledged and vowed to quash.“The members of our committee have no tolerance for persistently elevated inflation, and we share a resolute commitment to ensure price stability,” he said at a congressional hearing earlier this month.

The Fed’s main tool to combat higher prices is by hiking interest rates, which raises borrowing costs and in effect cools the economy. But Trump has persistently and aggressively called for rate cuts since the start of his presidency, going so far as to attack the previous Fed chair, Jerome Powell – who is still on the Fed’s board – with verbal insults and target him with a Department of Justice investigation for failing to deliver.Fed governors periodically release forward-looking projections illustrating when they think further rate changes will occur.

Last month, half of all Fed’s members projected at least one rate increase this year, in an incredible U-turn in outlook from just months earlier, when a majority of Fed members called for at least one rate cut over the same time period.Trump on Monday repeated his insistence of lower interest rates in front of reporters, adding that the US “should have the lowest rates in the world”.Trump spared Warsh from any blame, calling him “fantastic” and implying that he would want to cut rates despite the opinions of his fellow board members, who he called “very political”.

Warsh, however, has warmly praised the rest of his board, and said that he has been “heartened” by the welcome and encouragement he has received from his colleagues.“We’re determined as ever to fulfill the mission that Congress has given us,” he said in front of the House financial services committee earlier this month.Explore more on these topicsUS economyFederal ReserveUS interest ratesUS politicsTrump administrationnewsShareReuse this content