US Fed holds interest rates steady at opening 2026 meeting

The US Federal Open Market Committee (FOMC) has maintained its key interest rates in the range of 3.50% to 3.75%, following three rate cuts in 2025.

IMAGE: The US Fed's head office in Washington DC. Getty Images

The rate decision comes against the backdrop of a weaker US dollar, which was trading near a four-year low against major currencies on Wednesday – adding complexity to the US Fed’s inflation outlook.

The US central bank has reiterated its commitment to achieving a 2% inflation rate over the longer run.

“The [Fed] statement leaned a touch more confident on growth and the labour market, and still careful on inflation,” SPI Asset Management managing partner Stephen Innes said.

Lower interest rates in the US can boost demand growth by making dollar-denominated commodities like oil more affordable for holders of other currencies.

Meanwhile, by keeping interest rates unchanged, the Fed has left market participants guessing about its next move.

Market participants are now looking for clues from the Fed’s monetary policy outlook for 2026.

By Aparupa Mazumder

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