Federal Reserve holds discount rate steady at 3.75% as inflation hawks circle

The Federal Reserve Board voted unanimously on July 29, 2026, to keep the primary credit rate parked at 3.75%, according to minutes released from its discount rate meetings held on July 20 and July 29. While the discount rate vote was unanimous, the parallel FOMC decision to maintain the federal funds target range at 3.5%-3.75% was anything but. That vote came in at 9-3, with three governors, Beth M. Hammack, Neel Kashkari, and Lorie K. Logan, pushing for a 25-basis-point hike. A Fed still wrestling with inflation The core tension is familiar by now: inflation remains stubbornly above the Fed’s 2% target. The FOMC minutes, released on August 19, noted that “several” participants called for a more restrictive monetary stance to address ongoing price pressures. Chairman Kevin Warsh, navigating only his second meeting at the helm, struck what might be called a hedged-hawkish tone. He emphasized the potential need for future policy tightening if inflation fails to moderate. Interest on reserves was held at 3.65%, consistent with the broader decision to leave the rate framework untouched. The effective date for the maintained primary credit rate is July 30, 2026, and the next scheduled ...