Fed Holds Interest Rate at 3.50%-3.75%, Middle East Uncertainty a Key Concern

The US Federal Reserve maintained its federal funds rate target in the 3.50% to 3.75% range at the Federal Open Market Committee (FOMC) meeting on April 29, 2026. The decision kept the Fed in a wait-and-see posture as officials balance inflation risk against a softer labor market. Nearly all voting members supported holding rates steady, while one member favored a 0.25% rate cut. Core CPI inflation rose 2.6% year-over-year in March, while shelter costs increased 3.0%. The Fed also stated that Middle East developments contribute to elevated economic uncertainty. Fed Chair Jerome Powell's term expires on May 15, 2026, with Kevin Warsh as his nominated successor. The Fed's median projection still points to one quarter-point cut in 2026.