US Fed keeps rate at 3.75–4% despite inflation — The Hill

In the United States, the Federal Reserve kept the target range for its benchmark interest rate at 3.75–4%. The Fed’s Federal Open Market Committee made the decision on Wednesday by a vote of 10 to 2, The Hill reports.

Two committee members did not support the decision

Federal Reserve Board Governor Lisa Cook and Cleveland Federal Reserve Bank President Beth Hammack voted to raise the rate by 0.25 percentage points. The decision was made six weeks after the previous quarter-point increase, the first in more than three years.

Before the meeting, traders barely expected a rate change: according to CME FedWatch, the probability of keeping it unchanged was estimated at 90.6%. Inflation, meanwhile, has remained above the Fed’s 2% target for five and a half years.

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Inflation accelerated in September

Annual inflation, calculated using the consumer price index, rose from 3.4% in August to 3.7% in September. The publication links pressure on the economy to energy shocks, noting in particular that gasoline prices in September recorded their largest monthly increase since March.

Several Fed officials had previously stressed the need to patiently assess economic data. According to the committee’s quarterly economic projections, last month 12 of its 18 members expected one more rate increase by the end of the year after the September move.