The Federal Reserve held interest rates steady for the fifth consecutive time, with Fed official Walsh stressing that the 2% inflation target remains unchanged and that the central bank will not hesitate to raise interest rates if necessary.

The Federal Reserve held the federal funds rate steady in the 3.50%-3.75% range for the fifth consecutive meeting. The FOMC approved the decision by a 9-to-3 vote, with three regional Federal Reserve presidents voting in favor of a rate hike — the first time since 2016 that three dissenting votes were cast in support of a rate increase. Fed Chair Walsh said at the post-meeting press conference that the Fed does not have a "flexible inflation target", its sole mandate has always been a 2% inflation rate, and it will not hesitate to take action when necessary and appropriate if inflation remains elevated. He emphasized that the current decision should not be labeled a "pause"; holding rates is just the start of the policy process, not the end. He also noted that market pricing is for observation only and will not be used to shape policy. Walsh added that U.S. economic activity is solid, with robust productivity, capital expenditure, and AI investment, while the labor market remains stable and has "performed quite well" in achieving full employment. The Fed is currently conducting a rigorous assessment of economic conditions. On the dissenting votes, he explained that the committee held full internal discussions, but the final decision was still backed by the vast majority of members. In markets, spot gold rose by more than $50 during the resolution announcement and press conference, briefly breaking above $4,100. The U.S. Dollar Index fell below 101, the 2-year U.S. Treasury yield dropped by roughly 8 basis points, while the 30-year yield climbed by about 10 basis points. Rate markets have pared their overall pricing for additional rate hikes this year, but still price in roughly 15 basis points of a September rate hike. Trump later claimed that Walsh wants to cut interest rates, but the Federal Reserve has a "political board of governors".