RESOLVING THE LEDGER
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WASHINGTON \u2014 The Federal Reserve held interest rates steady on Wednesday, a choice that may intensify questions about how central bank chief Kevin Warsh will deliver on his commitment to bring inflation back down to the 2% target.The \u200bwidely expected decision to leave the benchmark interest rate in the 3.50%-3.75% range drew dissents from three of the 12 members of the policy-setting Federal Open Market Committee who "preferred" a quarter-percentage-point hike at this meeting.Those same three officials \u2014 the presidents of the Fed's Cleveland, Dallas and Minneapolis regional banks \u2014 had also dissented at Jerome Powell's final meeting as central bank chief in late April. In that case, they \u200cfavored removing the implied promise of lower rates in the policy statements.Warsh, who took over as head of the Fed in May, has said he has "no tolerance" for inflation that has been running above the central bank's target for more than five years, and up until last month was accelerating \u2060as the war in the Middle East pushed up global fuel and food prices, and investment in data \u200bcenters and other spending tied to artificial intelligence drove up demand."Inflation remains elevated relative to the Committee's 2% \u2060goal," the Fed said in a short policy statement after the end of its latest two-day meeting. It replicated word for word all of the June 17 statement's assessment of the economy.The Fed noted that economic activity is "expanding at \u200ca solid pace," saying, as it did in June, \u200cthat job gains "have kept pace with the workforce, and the unemployment rate has changed little."Speaking in a press conference after the release of the policy decision, Warsh said, "We've begun a new \u2060chapter and we understand that the five-plus years of inflation above-target cannot be cured in nine weeks, or by a single month of modest \u2060price decreases. This Fed will not waver" on getting inflation back to the 2% target.Markets price in hikesWhile he declined to say what's next for monetary policy, Warsh said, "I want to stress, of course, that decisions by this committee matter a great deal, and where necessary and appropriate, we will not hesitate to act."He noted that bond yields since the Fed's last monetary policy meeting have risen notably \u2014 investors have priced in interest rate increases \u2014 and he welcomed that move, even while saying it did not mean the central bank needed to ratify it with action."I was co
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