US Fed holds interest rates steady despite 'too high' inflation
The 12-member Federal Open Market Committee voted 10-2 to hold rates at a target range between 3.75 to 4.00 percent, citing the need for more data in the fight against inflation, after having hiked for the first time in three years at its previous meeting in September.
The US Federal Reserve maintained interest rates at a target range of 3.75 to 4.00 percent during its meeting, despite continued high inflation. The 12-member committee, which includes Federal Reserve Chairman Kevin Warsh, voted 10-2 to hold rates steady, citing the need for more data to determine the appropriate policy stance and ensure inflation returns to the Fed's two-percent goal.
Two dissenting members, Governor Lisa Cook and Cleveland Fed President Beth Hammack, called for an immediate rate hike. Warsh acknowledged that energy prices have risen again but emphasized the importance of preventing price inflation from spreading across the economy. The Fed's decision comes six days before the November 3 midterm elections, a period in which the Democratic Party aims to gain control of both houses of Congress from President Donald Trump's Republicans.
Trump's economic policies have been a significant issue in the campaign, with working-class households struggling amid high inflation. Despite the Fed's steady interest rates, the central bank has missed its inflation target for over five years, with household and business incomes suffering from persistent price increases. The Fed's decision to reduce the frequency of interest rate meetings in the next two years, from eight to seven times a year, reflects the committee's approach to balancing short-term economic developments with long-term strategic deliberations.
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