New Fed Chair Leads Vote to Hold Rates, Signals Possible Hikes
The Federal Reserve left its benchmark interest rate unchanged Wednesday, keeping the federal funds rate in a range of 3.5% to 3.75% for the fourth consecutive meeting, as new chairman Kevin Warsh signaled that rate hikes could be on the horizon.
All 12 members of the Federal Open Market Committee — including former chair Jerome Powell — voted to hold rates steady, but multiple sources report nine FOMC members indicated in the Fed’s updated “dot plot” that a rate hike is likely warranted before year-end.
The FOMC’s official statement cites “elevated uncertainty” tied in part to the conflict in the Middle East and noted that inflation “remains elevated relative to the committee’s 2% goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy.”
The committee also removed an easing bias section from its policy statement and sharply raised its inflation forecast for 2026, from 2.7% to 3.6%. Fed data cited in CDK’s recently released 2026 State of F&I at the Dealership report shows costs for vehicle purchases have remained elevated, with the average 60-month new-car loan rate running at 7.5%.
“The Fed will deliver price stability,” Warsh said at a post-meeting press conference, his first since taking the helm at the behest of President Donald Trump last month. “The commitment to deliver is strong, unanimous, and unambiguous.”
