The Federal Reserve's monetary policy committee voted to keep the short-term interest rate at 3.50 to 3.75 percent at its July 28–29, 2026 meeting, in line with market expectations. Nine members supported holding rates steady, while three voted for a 0.25 percentage point increase. The Fed noted that the U.S. economy continues to expand robustly despite high uncertainty from Middle East conflicts, but inflation remains above the long-term 2 percent target. Core inflation has accelerated due to rising global energy and food prices, as well as business spending on artificial intelligence. Fed Chair Kevin Warsh said the central bank will not waver in bringing inflation back to target, and if inflation stays elevated throughout the forecast horizon, interest rates may be part of the solution but not the only tool.