Federal Reserve Board Holds Federal Funds Rate Target Range at 3.5% to 3.75%

The Federal Reserve’s Federal Open Market Committee on June 17, 2026 held the target range for the federal funds rate at 3.5% to 3.75%, saying economic activity is expanding at a solid pace despite elevated uncertainty tied in part to the conflict in the Middle East, while inflation remains elevated relative to its 2% goal partly because supply shocks have lifted prices in sectors including energy. The Committee reaffirmed its ample-reserves framework and directed the New York Fed’s Open Market Desk to maintain the federal funds rate within the target range, with the interest rate paid on reserve balances kept at 3.65% effective June 18, and said System Open Market Account holdings could be increased through Treasury bill purchases and, if needed, other Treasury securities with remaining maturities of 3 years or less to maintain an ample level of reserves, while Treasury principal will be rolled over and agency principal reinvested into Treasury bills. Domestically, the Committee said productivity growth and capital investment are strong, job gains have kept pace with the workforce, and the unemployment rate has changed little. The global backdrop cited elevated uncertainty from the Middle East conflict and energy-related supply shocks, and the Committee said it will deliver price stability.