WASHINGTON, D.C.—The Federal Open Market Committee voted 10-2 on Wednesday to keep the target range for the federal funds rate at 3.75% to 4%. Officials said the decision supports the Fed’s dual mandate and that they are continuing the policy of maintaining ample reserves in the banking system.
In its statement, the committee said economic activity is expanding at a strong pace. Domestic spending has been resilient even as uncertainty remains elevated, owing in part to geopolitical developments. Productivity growth is strong, capital investment is robust, job gains have kept pace with the workforce, and the unemployment rate has changed little.
“Inflation remains elevated,” the statement said. “The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal. The Committee will deliver price stability.”
Fed Governor Lisa D. Cook, who is subject of a formal White House inquiry into allegations of false statements on mortgage documents, and Cleveland Fed President Beth M. Hammack dissented, preferring a quarter-point increase. Cook’s dissent was her first as a governor; Hammack has previously favored tighter policy.
The hold follows a unanimous quarter-point hike on Sept. 16 — the first increase in more than three years under Chair Kevin Warsh — that moved the range to its current level amid persistent inflation pressures. The October statement upgraded the description of growth from the “solid” pace cited in September. The decision arrives days before the U.S. midterm elections, with markets largely expecting the pause and focusing next on the December meeting and incoming inflation data.
Author: Lynnwood Times Staff
