The US Federal Reserve maintained the status quo on interest rates on Wednesday, 28 October, in line with market expectations, even as the central bank said inflation remains elevated while economic activity is growing strongly.
The Federal Open Market Committee (FOMC) decided to maintain the target range for the federal funds rate at 3.75% to 4%, which was raised to this level on 16 September this year, marking the first US Fed interest rate hike since 2023.
The FOMC approved the policy decision by a 10 – 2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favour of a 25-basis-point rate hike.
"Economic activity is expanding at a strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little," the FOMC statement read.
"Inflation remains elevated. 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% goal."