InvestmentNews reported on Wednesday that the Federal Reserve voted to hold interest rates steady in a divided decision, even as the central bank described inflation as elevated and pointed to continued economic uncertainty. WealthManagement.com reported that the Federal Open Market Committee voted 10-2 to keep its benchmark federal funds rate in a range of 3.75% to 4%.
Advisor Perspectives, which reproduced the policy statement, reported that the two dissenting votes came from Governor Lisa Cook and Cleveland Fed President Beth Hammack. Both preferred raising the target range for the federal funds rate by a quarter percentage point at the meeting. The statement itself said inflation remains elevated.
According to CNBC, the statement also described economic activity as expanding at a strong pace, a step up from the solid pace it cited in September. Taken together, the language signaled that the committee saw strength in the economy and persistent price pressure, even while it chose not to move rates.
The hold followed a quarter-point increase in September, the first rate hike since 2023, according to Fox Business. CME Group reported that the September decision was a 12-0 vote. Real Estate News cited the 3.7% September consumer price index reading as one factor behind the firmer tone of the October statement.
Market pricing moved toward tightening after the decision. Fox Business reported that According to Fox Business, after the decision CME FedWatch put the probability of a December rate hike at about 82.6%, up from 78.3%.
Fed Chair Kevin Warsh said politics played no role in the decision, according to Yahoo Finance's live coverage of the meeting, even though the midterm elections were only days away.
According to a U.S. News article carrying the Reuters report on the meeting, Ronald Gestiehr, director of wealth management at Luttner Financial in Pittsburgh, judged the decision to be the correct one. Kay Haigh, global chief investment officer of fixed income at Goldman Sachs Asset Management, also commented on the outcome in the same coverage.
Looking ahead, CNBC reported that Warsh said a 2027 meeting will be devoted to strategy, and that no vote on rates or policy statement is anticipated. Reuters reported, via U.S. News, that the Fed will reduce its policy-meeting schedule beginning next year. Coverage the research relied on gave conflicting dates for the next policy meeting in December, so this article does not state one.