The Federal Reserve voted 11-1 to hold its benchmark interest rate at 3.5%-3.75%, citing mixed economic signals, persistent inflation, and uncertainty from the war in Iran.

Fed officials projected slightly faster economic growth and higher inflation for 2026, while signaling one possible rate cut this year and another in 2027, though timing remains uncertain.

Rising oil prices and energy disruptions from the Middle East conflict have pushed near-term inflation expectations higher, complicating monetary policy.

The decision comes amid political pressures, including criticism from President Trump and ongoing legal disputes involving Fed Chair Jerome Powell, whose term ends in May, CNBC has reported.

Powell emphasized he will remain in office until investigations are resolved, with his long-term position on the board extending to 2028.