The US Federal Reserve kept interest rates unchanged on Wednesday, October 28, following September's quarter-percentage-point increase, as policymakers weighed persistent inflation against signs of strength in the American economy. Two officials dissented, favouring another rate hike.
The Federal Open Market Committee (FOMC) maintained its benchmark federal funds rate in the 3.75-4 percent range, in line with market expectations. The decision was approved by a 10-2 vote, with Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack favouring a 25-basis-point increase.
The decision comes as the central bank assesses whether further monetary tightening is necessary to contain inflationary pressures arising from elevated energy costs, tariffs, resilient consumer spending and an artificial intelligence-driven investment boom.
The Fed also upgraded its assessment of the US economy, describing economic activity as expanding at a "strong" pace, compared with the "solid" expansion noted at its September meeting.
However, policymakers acknowledged that inflation remained elevated and indicated that further economic data would help determine the appropriate course of monetary policy. "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," the Fed said in its policy statement.