Fed keeps interest rates unchanged, but two officials dissented in favor of a rate hike

By Rachel Siegel

The Federal Reserve on Wednesday held interest rates steady, even as inflation continues to weigh on American households.

The widely expected move leaves the Fed’s benchmark interest rate at a range between 3.75% and 4%.

In a statement, Fed leaders said uncertainty was still high, in part because of “geopolitical developments.”

Officials also said “the accumulation of more information will help” them determine next steps “to ensure a timely return of inflation” to normal levels. That new language indicates policymakers are still open to another hike down the road.

At the Fed’s September meeting, central bankers signaled another hike before the end of the year. That suggests another quarter-point increase could come when officials convene again in early December, depending on how the economy evolves.

Unlike the Federal Reserve’s last decision, this one was not unanimous. Two leaders — Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack – voted against today’s move. They preferred to go ahead and raise rates by a quarter point.

Cook has never dissented on a monetary policy decision; Hammack has raised concerns about inflation for months.

This month, President Donald Trump renewed his push to oust Cook from the Fed board.

Policymakers are contending with inflation that has for years stayed higher than normal. Price increases are now being driven by gas and energy costs, which have been on an upward climb since the start of the war with Iran. The job market is stable, albeit lackluster, which could make the Fed more comfortable raising rates further and slowing the economy.

In fact, Fed leaders on Wednesday said economic activity is growing at a “strong pace” and that domestic spending has been “resilient.” Job gains are keeping pace with the workforce, and the unemployment rate hasn’t changed much.

The-CNN-Wire
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