Fed Keeps Policy Rate at 3.5%–3.75% as Inflation Stays Elevated

The Federal Reserve left interest rates unchanged after its July 28–29 meeting, keeping the federal funds rate in a target range of 3.5%–3.75%. The decision marks a fifth straight meeting without a move, even as inflation remains at 4.1% and oil prices continue to rise. The statement was released at 2 p.m. ET on July 29, as scheduled. Fed Chair Kevin Warsh has been dialing back explicit forward guidance in recent months, a shift aimed at preserving flexibility while inflation runs more than double the central bank's 2% goal. Minutes from the June 17 meeting offered a clearer view of the debate inside the committee. While the vote to hold rates was unanimous, the discussion showed a split on next steps: some officials favored tightening sooner, others argued for waiting. Energy costs are a key part of the inflation picture. Higher oil prices feed into shipping, production inputs, and consumer prices, making it harder for inflation to cool on its own. Markets are increasingly leaning toward another hike, with pricing now implying an 80% probability of a rate increase by September 2026. Crypto and other risk assets are watching the path of inflation closely. Bitcoin traded around $64,300–$64,400 ahead of the announcement, while altcoins showed mixed performance, reflecting the uncertainty already being absorbed by the market. Cooling inflation data between now and September would likely ease expectations for a hike and give risk assets room to rally. If inflation stays elevated or re-accelerates, the market-implied probability could rise further. With guidance reduced under Warsh, traders are likely to focus less on the decision itself and more on small shifts in how the Fed describes inflation risks and labor-market conditions.