US central bank holds interest rates steady ahead of midterm elections – here's what that means
Summary
The Federal Reserve kept its target interest rate at 3.75%–4%, saying it needs more economic data before deciding whether to change rates again. Chair Kevin Warsh said inflation remains too high, while the U.S. economy remains resilient and signs suggest policy is having an effect.Key Facts
- The Fed held rates steady after raising them for the first time in three years at its September meeting.
- Ten of the 12 committee members voted to keep rates unchanged; Lisa Cook and Beth Hammack voted for an increase to 4%–4.25%.
- The Fed said it wants more information because inflation remains high and economic conditions are uncertain.
- Warsh said the next meeting’s decision will depend on economic data released before then.
- The Fed’s next meeting is scheduled for December 8–9.
- The federal funds rate influences borrowing costs for items such as mortgages, credit cards, and business loans, as well as returns on savings.
- The Fed aims to keep inflation at 2% a year and support a stable job market.
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