The US Federal Reserve kept its benchmark interest rate at 3.75%–4% on October 28, with two officials seeking an increase. The Washington central bank said inflation remained elevated and further information would guide policy, according to its statement released at 2 p.m. Eastern time.
The Federal Open Market Committee voted 10–2 for the pause. Governor Lisa Cook and Cleveland Fed President Beth Hammack preferred a quarter-percentage-point increase. Their dissent favored tighter policy, underscoring disagreement over how quickly to respond to persistent price pressures.
The Fed described economic growth as strong, domestic spending as resilient and capital investment as robust. It said employment gains had kept pace with the workforce and unemployment had changed little. Geopolitical developments nevertheless contributed to elevated uncertainty, the statement said.
Officials reiterated their goal of returning inflation to 2% and said additional information would help determine the appropriate policy stance. Reuters reported that the widely expected pause left borrowing costs unchanged ahead of the following week's US midterm elections. The decision did not announce a timetable for another increase.
US stocks ended higher after fluctuating around the decision and Chairman Kevin Warsh's press conference, Reuters reported. At that conference, Warsh said the bank had signaled its willingness and readiness to act. The market response came as investors also focused on major corporate earnings.
Attention now turns to economic releases expected on October 29. Reuters identified the Commerce Department's personal consumption expenditures report, including the Fed's preferred inflation gauge, and its first estimate of third-quarter growth as potential influences on rate expectations before the December policy meeting.
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