Fed holds interest rates steady even as inflation remains high
Summary
The Federal Reserve kept its benchmark interest rate at 3.75% to 4% after raising it in September, citing strong economic growth and inflation that remains above its 2% goal. The decision drew two votes for a quarter-point increase; officials may consider another hike in December, while the article notes that higher rates can raise borrowing costs for consumers.Key Facts
- The Fed held the federal funds rate target range at 3.75% to 4%.
- Ten members of the Federal Open Market Committee voted to keep rates steady; Lisa Cook and Beth Hammack voted for a 0.25-percentage-point increase.
- The Fed said economic activity was growing at a strong pace and inflation remained elevated.
- The article reports that the Consumer Price Index rose 3.7% over the year, while core inflation rose 2.6%.
- Many economists expect the Fed could raise rates at its final meeting of the year in December, though the article says this is not certain.
- The federal funds rate influences borrowing costs for products such as bank loans, credit cards, and auto loans, as well as returns on savings accounts.
- The article says the Iran war has kept global energy costs elevated and that solid growth and consumer spending are adding pressure to prices.
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