Fed votes 10-2 in favor of holding rates unchanged, warns uncertainty ‘remains elevated' and sees ‘risks to both sides of its dual mandate'

• The FOMC maintained rates with a 10-2 vote, with dissenters Stephen Miran and Christopher Waller advocating for a 0.25% rate cut
• The Fed acknowledged that economic activity is expanding solidly but noted job gains remain low, unemployment shows signs of stabilization, and inflation remains somewhat elevated
• The central bank emphasized that 'uncertainty about the economic outlook remains elevated' and is monitoring risks to both sides of its dual mandate of maximum employment and 2% inflation

Summary

The Federal Reserve held interest rates steady at 3.50%-3.75% following Wednesday's FOMC meeting, a decision that aligned with market expectations. The vote was 10-2, with dissenting members Stephen Miran and Christopher Waller advocating for a 0.25% rate cut.

Key Economic Assessment:

The Fed characterized economic activity as "expanding at a solid pace," though noted that job gains "have remained low" with unemployment showing "some signs of stabilization." Inflation was described as "somewhat elevated," remaining above the Fed's 2% target.

Market Outlook:

The central bank emphasized that "uncertainty about the economic outlook remains elevated" and stated it is "attentive to the risks to both sides of its dual mandate"—referring to both maximum employment and price stability. The FOMC indicated it will "carefully assess incoming data" when considering future rate adjustments and remains prepared to modify policy if risks emerge.

Market Reaction:

Gold prices showed minimal response to the announcement, trading at $3,285.60 per ounce, up 2.03% on the session.

Leadership:

The majority vote included Chair Jerome Powell, Vice Chair John Williams, and eight other members supporting the hold decision.

Implications:

The split vote and acknowledgment of two-sided risks suggest the Fed is adopting a cautious, data-dependent approach amid economic uncertainty. The dissenting votes for a rate cut may signal growing concern among some members about potential economic softening, keeping both rate cuts and holds on the table for future meetings.