Fed holds rates days before US midterms as two officials push for another hike
The Federal Reserve kept interest rates unchanged on Wednesday, six days before the midterms, but two officials, including Governor Lisa Cook, whom US President Donald Trump is trying to fire, voted for a hike, with inflation at 3.7% and investors still braced for a rise in December.
The Federal Reserve maintained its interest rate at 3.75% to 4% on Wednesday, maintaining the range after increasing borrowing costs in September for the first time in three years. However, 10 of the 12 policymakers voted in favor of another quarter-point increase, with Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack leading the dissent.
The decision came just days before the US midterm elections, with inflation at 3.7% and energy prices high. Markets anticipate the central bank will raise rates again in December, though some economists argue that the dissent could bolster Fed Chair Kevin Warsh's case for tighter monetary policy. The Fed's statement left its options open, stating that more information would aid in determining the policy stance needed to restore inflation to its 2% target and reaffirming its commitment to price stability.
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