Fed Holds Rates Steady as Powell Signals Patience on Inflation Glidepath

The Federal Reserve left its benchmark interest rate unchanged at a range of 4.25% to 4.50% on Wednesday, extending a cautious stance that has defined the central bank’s posture through the first four months of 2026.

Speaking at a press conference in Washington, Chair Jerome Powell said policymakers remain data-dependent and are unwilling to declare victory on inflation until they see “several more months” of readings consistent with the Fed’s 2% target.

Treasury yields moved in a narrow range after the decision, with the 10-year note trading near 4.12%. The S&P 500 pared earlier gains to finish 0.2% higher, while the dollar strengthened against a basket of major currencies.

Futures markets now price in two quarter-point cuts by year-end, down from three earlier in the month. That shift reflects a run of firmer-than-expected prints on services inflation and a labor market that has defied forecasts of a sharper slowdown.

“The risk of cutting too soon still outweighs the risk of cutting too late,” said Priya Misra, head of global rates strategy at JPMorgan Asset Management. “Powell is buying time, and the data is giving him room to do it.”

Emerging-market policymakers, including Bank Indonesia, have signaled they will follow the Fed’s lead, keeping their own easing cycles on hold until the rupiah and other regional currencies stabilize.