Fed Holds Rates at 3.75%-4.00%, Upgrades Economic Outlook (Update)

Cook and Hammack Called for a 0.25-Percentage-Point Rate Hike
Inflation: "Still Elevated"

The U.S. Federal Reserve (Fed) held its benchmark interest rate steady. After raising rates in September for the first time in more than three years, it appears to be pausing to assess additional economic data. However, the Fed upgraded its assessment of the economy, saying it is growing at a strong pace, and two officials called for another rate hike, leaving the possibility of a December increase open.

October Federal Open Market Committee (FOMC) Statement

At its regular October Federal Open Market Committee (FOMC) meeting on October 28 (local time), the Fed held its federal funds rate target range steady at 3.75% to 4.00% per year.

The decision was made by a 10-2 vote. Fed Governor Lisa Cook and Beth Hammack, president of the Federal Reserve Bank of Cleveland, dissented, saying the benchmark interest rate should be raised by 0.25 percentage points. At the September FOMC meeting, all 12 voting members supported a rate hike.

The October FOMC meeting showed a shift in the Fed's assessment of the U.S. economy. In its statement, the Fed said, "Economic activity has been expanding at a strong pace." This marked an upgrade from the previous month's statement, which said activity had been expanding at a "solid" pace.

The Fed's assessment of prices was unchanged from September, describing inflation as "still elevated." Its view that uncertainty remained high, partly due to geopolitical developments, also stayed the same.

As in September, the Fed maintained its assessment that U.S. productivity growth was strong and business capital investment was solid. Its assessment of employment also remained unchanged. It said the unemployment rate had changed little, while the pace of job growth was keeping pace with labor force growth.

Regarding future policy decisions, the Fed said, "The Committee will be aided by the accumulation of additional information in assessing the appropriate stance of monetary policy to return inflation to the Committee's 2% objective in a timely manner."

This content was produced with the assistance of AI translation services.