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Informist, Thursday, Apr. 30, 2026

NEW DELHI – The US Federal Open Market Committee Wednesday held the federal funds target range at 3.50-3.75% for the third straight meeting in 2026, as widely expected. The comments were little changed from the previous meeting in March, though some members of the panel favoured a tighter tone on monetary policy as inflation risks increased. 

Eight members of the committee voted for the rate decision and the policy commentary. As has been the case for several meetings, US Federal Reserve Governor Stephan Miran voted to cut the policy rate by 25 basis points. "...Beth M. Hammack, Neel Kashkari, and Lorie K. Logan, who supported maintaining the target range for the federal funds rate but did not support inclusion of an easing bias in the statement at this time," the FOMC statement said. 

Inflation has risen reflecting in part the global rise in energy prices, the committee said. Brent crude has surged since late February after the US and Israel attacked Iran, leading to a closure of the vital Strait of Hormuz to oil tankers. Meanwhile, the committee said economic activity had expanded at a solid pace in recent months, but developments in the Middle East are contributing to a high level of uncertainty around the economic outlook. 

After the decision, the 10-year US Treasury yield was little changed as both the rate action and commentary were on expected lines. However, the yield had risen above 4.40% for the first time since March tracking a rise in Brent futures for June delivery to near $120 a barrel during the day. At 0005 IST, it was 4.41%.

The FOMC termed job gains in recent months as low, on average, while the unemployment rate had not changed much. Government data showed the unemployment rate in the US was 4.3% in January and March, the latest reading, while being 4.4% in December and February. Most of the forward-looking commentary was unchanged from the March rate decision. As usual, the committee said it would change its stance if incoming data showed risks to achieve its dual mandate of maximising jobs while keeping price rise in check. 

"In considering the extent and timing of additional adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks," the statement said. "The Committee is strongly committed to supporting maximum employment and returning inflation to its 2 percent objective."

The April meeting was not linked to a release of the summary of economic projections on growth, inflation, and interest rates. Last month, the US Fed guided for one 25-basis-point rate cut in 2026, according to the median estimate of its 19 officials.  End

US$1 = INR 94.85

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Aaryan Khanna

Edited by Akul Nishant Akhoury

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