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Fed holds rates as Warsh embraces 'family fight'
Federal Reserve Chair Kevin Warsh said the central bank’s latest policy meeting delivered the “family fight” he had called for, as policymakers debated the future direction of interest rates amid persistent inflation concerns and Middle East tensions. The Federal Reserve kept its benchmark lending rate unchanged at 3.5%-3.75% for the fifth consecutive meeting, with the conflict in the Middle East adding uncertainty to the inflation outlook. The decision was not unanimous, with Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan dissenting in favour of a quarter-point rate increase. The three dissents marked the most policymakers voting for a rate move in the same direction since September 2016. However, Warsh said he viewed the disagreement positively. “I asked for a good family fight and I got one,” Warsh said during a post-meeting news conference. “It was an active, robust discussion about what’s in the full range of what we can do and might want to do in the period ahead.” Investors have increasingly priced in higher interest rates, with markets expecting more than one rate hike by the end of the year. Longer-term borrowing costs have also risen, i
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Fed minutes show division on rate path
Federal Reserve officials were divided over the direction of United States interest rates at their June policy meeting, with policymakers debating whether easing inflation could justify rate cuts or whether persistent price pressures would require further tightening, according to minutes released on Wednesday (Thursday AEST). The 16-17 June meeting was the first chaired by Federal Reserve Chairman Kevin Warsh, with the Federal Open Market Committee (FOMC) unanimously voting to leave the benchmark federal funds rate unchanged at 3.5%-3.75%, where it has remained throughout 2026. Speaking after the meeting, Warsh described the internal debate as a "family fight", although the minutes revealed no signs of significant disagreement beyond differing economic outlooks. The committee's closely watched "dot plot" of individual rate projections, which did not include Warsh's forecasts, continued to point narrowly toward one interest rate hike this year, followed by one rate cut in each of the following two years. According to the minutes, many officials believed the federal funds rate would finish the year at or slightly below its current level. “Many participants indicated that the appropriate level of the federal funds rate
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RBA judges current policy as 'somewhat restrictive'
The Reserve Bank of Australia has reaffirmed that monetary policy remains restrictive, with minutes from its June meeting showing policymakers opted to leave the cash rate unchanged as they weighed persistent inflation risks against heightened uncertainty stemming from the Middle East. The minutes, released on Tuesday, detailed the Board's decision to keep the cash rate steady at 4.35%, with members concluding that existing policy settings remained appropriate despite easing financial conditions globally. Policymakers noted that global financial markets had become more accommodative following progress towards resolving the conflict between the United States and Iran. "Members observed that financial conditions abroad had eased somewhat since the previous meeting, in response to progress towards resolving the conflict in the Middle East. Expectations for central bank policy rates had generally declined, oil prices had fallen significantly and equity prices had risen in many countries. "Members acknowledged the indications of a potential resolution of the conflict but noted the ongoing uncertainty over the final outcome and the implications for energy markets." However, the Board cautioned that policy expectations abr
Interest rates
Fed holds rates; Warsh announces 5 task forces
The Federal Reserve left interest rates unchanged on Wednesday (Thursday AEST) while signalling that further tightening may be required to contain inflation, marking a significant shift in tone at the first policy meeting chaired by Kevin Warsh. The Federal Open Market Committee unanimously voted to maintain its benchmark federal funds rate within a target range of 3.50% to 3.75%, where it has remained since a series of rate cuts in late 2025. While the decision itself was widely expected, policymakers delivered a more hawkish message through updated economic projections and a streamlined policy statement that removed language previously interpreted as favouring future rate cuts. The central bank's closely watched Summary of Economic Projections (SEP) showed officials no longer expect a rate cut this year. Instead, the median projection now implies at least one interest rate increase before the end of 2026. Notably, Warsh did not submit an individual interest rate forecast as part of the Fed's "dot plot", continuing his long-standing criticism of the forecasting tool and other forms of forward guidance. "I did not submit a dot for me," Warsh said during a press conference following the decision. "It’s not helpful in
Interest rates
RBA holds rates at 4.35% as inflation risks persist
The Reserve Bank of Australia (RBA) left its cash rate unchanged at 4.35% on Tuesday, pausing after three consecutive interest rate increases as policymakers assessed the impact of tighter financial conditions and ongoing inflation pressures. The decision was widely expected by financial markets and was unanimously supported by the RBA Board. In its post-meeting statement, the Board noted that inflation remains uncomfortably high and continues to pose a challenge for policymakers. "Inflation picked up materially in the second half of 2025, and information since the beginning of this year confirms that some of the increase reflected greater capacity pressures. The latest data show that headline and underlying inflation are still too high." The Board also highlighted heightened economic uncertainties, as developments in the Middle East remain a key risk factor. "There continue to be heightened uncertainties about the outlook for domestic economic activity and inflation. Resolution of the conflict in the Middle East is at an early stage, and there are plausible scenarios where inflation is higher and activity lower than envisaged under the May baseline forecasts." "Global oil supply issues will take some time to res

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RBA lifts interest rates to 4.35%; inflation risks rise
The Reserve Bank of Australia (RBA) has raised the cash rate by 25 basis points to 4.35%, citing mounting inflationary pressures and heightened global uncertainty linked to the ongoing conflict in the Middle East. The decision, announced on Tuesday, reflects concerns over rising fuel and commodity prices, alongside persistent domestic capacity constraints. The move was supported by a majority of policymakers, with eight members voting in favour of the increase, while one member opted to keep the rate unchanged at 4.1%. In its Statement on Monetary Policy, the central bank noted stronger-than-expected economic activity in late 2025, alongside ongoing tightness in the labour market and sustained capacity pressures. "GDP growth picked up strongly in the December quarter, as expected, to be above our estimates of its potential growth rate. Survey measures of capacity utilisation remained above average in February and March, suggesting that capacity pressures persisted into early 2026. "Private investment was stronger than anticipated in the December quarter while household consumption growth was weaker than expected. Recent spending data suggest that there was a little less underlying momentum in household consumption p
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Fed holds rates steady as split deepens
The Federal Reserve held its benchmark interest rate unchanged on Wednesday (Thursday AEST), however, policymakers revealed an unusually high level of dissent amid growing divisions over how to respond to persistent inflation and an uncertain economic outlook. In what may mark Chair Jerome Powell’s final meeting leading the central bank, the Federal Open Market Committee voted 8-4 to keep the federal funds rate within a range of 3.5% to 3.75%. Financial markets had fully anticipated the decision, pricing in a near certainty that rates would remain unchanged. However, four officials dissented — the highest level of dissent since October 1992. Governor Stephen Miran again dissented in favour of a quarter-percentage-point rate cut, maintaining the position he has held since joining the Board in September 2025. In contrast, Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan supported holding rates steady but opposed language in the official statement that suggested a potential easing bias. At the centre of the disagreement was a key sentence in the post-meeting FOMC statement: “In considering the extent and timing of additional adjustments to the target ra
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RBA sees material enonomic effect of longer war
A longer conflict in the Middle East could have a material bearing on inflation and economic activity in Australia, according to the Minutes of the Reserve Bank of Australia’s March meeting. RBA Monetary Policy Committee members considered the implications for future decision of their split majority decision to raise the official cash interest rate by 25 basis points to 4.10% on 17 March. “They agreed that it was not possible to predict the future path for the cash rate target with any confidence, given the high degree of uncertainty around the breadth and duration of the current conflict in the Middle East,” the Minutes said. “A longer conflict could have a material bearing on both inflation and economic activity. Members therefore acknowledged that future policy decisions would require the Board to balance its two objectives carefully.” The board was split 5-4 in favour of an increase. Financial markets have rated the chances of another rate rise in May at 60%. “In finalising its statement, the Board agreed to remain attentive to the data and the evolving assessment of the outlook and risks when making its decisions,” it said. “The Board will remain focused on its mandate to deliver price stability and full
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Inflation larger problem than unemployment: Goolsbee
Inflation is now a larger issue than unemployment for the United States economy, Chicago Federal Reserve President Austan Goolsbee said, with both interest rate cuts and hikes potentially on the table. The Federal Reserve’s decisions will also depend on the U.S. war against Iran, said Goolsbee. Goolsbee is not a voting Federal Open Market Committee member this year, but will vote again in 2027. “The most important thing is to figure out the through line of what is happening,” Goolsbee told CNBC. “What makes this a fraught but intense moment is nobody can tell us what is going to happen on the ground in the conflict in the Middle East, and how long that lasts.” A rate increase could be a possibility later in the year, Goolsbee said, in response to soaring oil prices or if inflation rises. This would be the U.S.’ first rate hike since July 2023. “We could be back to the environment with multiple rate cuts for the year, if inflation behaves. I could see circumstances where we would need to raise rates if it was going a different way and inflation was getting out of control.” The Federal Reserve held rates steady at its last meeting in March. Traders expect a 92.8% chance that rates will also remain unchanged in April,