Federal Reserve Holds Rates at 3.75%-4% in 10-2 Vote

The Federal Reserve's policy committee voted 10-2 on October 28 to leave its benchmark interest-rate target at 3.75%-4%. The decision follows a quarter-percentage-point increase in September. Lisa D. Cook and Beth M. Hammack dissented because they preferred another quarter-point increase at this meeting. The Federal Open Market Committee described economic activity as expanding at a strong pace, with resilient domestic spending despite elevated uncertainty, partly linked to geopolitical developments. It also pointed to strong productivity growth and robust capital investment. The committee said job gains had kept pace with workforce growth and that the unemployment rate had changed little. Inflation remained elevated, according to the statement, which said additional information would guide the policy stance needed to return inflation to the 2% objective. The committee said, "The Committee will deliver price stability." It also retained its policy of maintaining ample reserves in the banking system. The statement did not commit to a further rate change at a specified meeting. On September 16, the committee had voted 12-0 to raise the target range to its current level, describing economic growth then as solid. The October implementation note leaves interest on reserve balances at 3.90%, effective October 29, and keeps the primary credit rate at 4.0%. These operating rates accompany the unchanged federal funds target.