Fed Freezes Benchmark Rate at 3.75–4% in 10-2 Split Decision

The Fed’s pause echoes the February 1995 meeting when Greenspan held rates at 6% after a year-long tightening cycle in hopes of engineering a ‘soft landing’; that gamble worked only briefly before the 1997 Asian crisis rewrote the script. Today’s hold occurs amid a structural shift away from the 2009-2021 zero-rate era: de-globalisation, ageing workforces, wartime energy shocks and chronic fiscal deficits are pushing the “neutral” rate higher than the post-GFC norm. Whether Chair Kevin Warsh can tame inflation without another lurch upward will shape the dollar system’s trajectory for decades—much as the 1970s Burns-Nixon clashes taught the cost of politically timed pauses. On a 100-year arc, this moment tests the Fed’s ability to protect its credibility while the United States’ once-ample policy space narrows; success would mark a late-2020s analogue to the 1994-95 soft landing, failure could foreshadow a 1979-style Volcker upheaval.