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US Federal Reserve Leaves Interest Rates Unchanged after FOMC
The Fed held rates steady on Wednesday, keeping the federal funds target range at 3.75%–4.00%. The vote was a hawkish 10–2: Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented because they wanted a quarter-point hike now.
The statement leaned hawkish:
Inflation “remains elevated,” and the Fed said it needs more information to decide what policy will bring it back to 2% in a “timely” way. September CPI was 3.7% year on year, driven by a 20% jump in energy prices tied to the Iran war.
The economy is “expanding at a strong pace,” with resilient spending and robust investment.
Jobs: the Fed described hiring as keeping pace with the workforce, though September payrolls rose only 29,000 and unemployment is 4.2%.
Uncertainty is elevated, partly from “geopolitical developments.” The statement didn’t name the Middle East or oil.
Chair Kevin Warsh said politics played no role in the decision, which came days before the US midterm elections.
Market reaction (intraday): the 10-year yield rose about 5 basis points to roughly 5.04%, and stocks were roughly flat. One broker’s report, citing Bloomberg, said rate futures were pricing about an 85% chance of a hike at the December 9 meeting, so markets now expect the Fed’s next move to be up, not down.
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