Fed holds rates steady at 3.75%–4% despite elevated inflation

Washington — The Federal Reserve held its benchmark interest rate steady in the range of 3.75% to 4%, announcing its decision on Wednesday after a two-day meeting, even as inflation remains elevated.

The vote was 10-2. Lisa Cook and Beth Hammack dissented, preferring a quarter-point increase. The central bank's statement said inflation remains elevated and economic activity is expanding at a strong pace, and that more information will help determine the appropriate stance to return inflation to its 2% target.

The decision follows the Fed's September rate hike, its first in more than three years. The September consumer price index rose 3.7% from a year earlier, still far from the 2% goal, leaving the door open to another move at the December meeting, as investors are betting.

The announcement follows up on the meeting this newspaper covered on Tuesday, when the Fed opened its two-day gathering with Wall Street awaiting the decision.

Photo: A Lo Claro Archive

Source: Fed statement via Morningstar / Dow Jones and New York Post