Federal funds rate held steady at 3.5-3.75 percent

The Federal Open Market Committee (FOMC) voted 12-0 to maintain the federal funds rate target range at 3-1/2 to 3-3/4 percent, reaffirming its commitment to ample reserves in the banking system.

This decision supports the Federal Reserve's dual mandate of maximum employment and price stability.

The Committee noted that economic activity continues to expand at a solid pace, supported by strong productivity growth and capital investment.

Job gains have kept pace with the workforce, and the unemployment rate remains largely unchanged.

However, inflation remains elevated above the Committee's 2 percent target, partly due to supply shocks driving price increases in specific sectors, notably energy.

The FOMC reiterated its resolve to achieve price stability.

To implement the monetary policy stance, the Board of Governors unanimously voted to maintain the interest rate paid on reserve balances (IORB) at 3.65 percent, effective June 18, 2026.

The Federal Open Market Committee (FOMC) issued a domestic policy directive to the Open Market Desk, instructing it to conduct open market operations to maintain the federal funds rate within its target range.

This directive also set the standing overnight repurchase agreement operations rate at 3.75 percent and the reverse repurchase agreement operations offering rate at 3.5 percent.

Furthermore, the Board of Governors unanimously approved establishing the primary credit rate at 3.75 percent.

These measures collectively support the Committee's policy of maintaining ample reserves in the banking system.