The Federal Reserve left its benchmark interest-rate range at 3.75% to 4% on October 28, with policymakers voting 10–2 to keep it unchanged. The decision followed a quarter-percentage-point increase in September.
Governor Lisa Cook and Cleveland Fed President Beth Hammack voted against the decision. Both preferred another quarter-point increase, according to the Federal Open Market Committee’s statement.
The Federal Reserve’s inflation assessment
The committee described economic growth as strong and said domestic spending had remained resilient. It also pointed to robust capital investment and productivity growth, while reporting little change in unemployment.
At the same time, the statement said inflation remained elevated. The committee plans to use additional economic information to assess the policy needed to return inflation to its 2% target. It did not announce a date or size for another rate change.
What the Fed chair said
At his subsequent press conference, Fed Chair Kevin Warsh said he believed inflation could be reduced without deliberately slowing growth or increasing unemployment, Reuters reported. He argued that productivity improvements could allow the economy to expand faster without generating the same degree of price pressure.
Warsh also said the higher policy rate was already contributing to somewhat tighter credit conditions. According to Reuters, he identified possible effects on business investment and spending as channels through which those conditions could reduce inflation.
The next decision remains open
Reuters reported that the next policy meeting is scheduled for December 8–9. The October pause leaves the September increase in place while officials assess further data.
The two dissenting votes show that some committee members preferred an immediate increase. They do not establish how the committee will vote at its next meeting. The published decision commits the Fed to its inflation objective while leaving the next adjustment unspecified.
Sources: Federal Reserve — October 28 FOMC statement, Reuters via MarketScreener.
