The Fed kept interest rates unchanged at 3.50%–3.75%, but the meeting carried a hawkish tone. Three FOMC members dissented in favor of a rate hike, while Fed Chair Kevin Warsh reiterated that the Fed "will not hesitate to act" if inflation remains elevated. At the same time, the 30-year Treasury yield climbed above 5.2%, its highest level since 2007, reflecting continued inflation concerns in the bond market. Despite the cautious message, markets reacted with a strong risk-on move. Equities posted an impressive recovery, with broad-based gains across sectors supported by high trading volume, suggesting investors focused on the fact that the Fed held rates steady rather than tightening policy. Attention now shifts to Jackson Hole at the end of August, where investors will look for further guidance on the Fed's next move.