📌 Fed: Holds Rates Steady at 3.50%–3.75% The Fed held rates steady yesterday in the 3.50%–3.75% range, but the vote split 9–3, with three regional presidents advocating for a 25-basis-point hike—indicating that the discussion on the table was about tightening, not easing. Chair Kevin Warsh stated that the Fed will not compromise on its 2% inflation target, citing tariff hikes and energy supply disruptions from the Middle East as key drivers for potential rate increases. Additionally, the Fed signaled it has largely abandoned its forward guidance, stating, “The market is learning to play with the ball, not the referee,” and offered no clear commitments regarding future steps. According to CME FedWatch, there is a 65% probability of at least a 25-basis-point rate hike by September. Market expectations currently center on a 25-bp increase in September; however, if energy and tariff pressures persist, a 50-bp hike remains possible. Following the decision and statement, U.S. 10-year Treasury yields rose to 4.7%.