In its latest decision, the Federal Reserve has maintained its benchmark interest rate in the 3.75%–4.00% range, reaffirming its commitment to curbing inflation. However, the U.S. central bank provided no clear signal as to whether interest rates will be raised at its December meeting.
The decision was approved by a 10–2 vote. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, favoring a 25-basis-point interest rate hike.
In its statement, the Fed emphasized that incoming data will help determine the appropriate policy to bring inflation back toward its 2% target. The central bank also noted that economic activity continues to grow strongly, with domestic spending remaining resilient and the unemployment rate staying relatively stable.
Inflationary pressure remains a primary concern. Consumer inflation in September rose at its fastest pace in five months, driven largely by an increase in energy prices linked to the conflict involving Iran. Price increases, however, were also observed more broadly across various goods and services.
The market is now awaiting the PCE (Personal Consumption Expenditures) data—the Fed’s preferred inflation gauge—as well as third-quarter economic growth figures. Economists estimate that the U.S. economy grew by approximately 3.2% on an annualized basis, supported by robust consumption and significant investment in the artificial intelligence sector.
Market expectations for a December rate hike had previously surged above 70% following the September rate increase. That probability has since fallen below 30%, after several Fed officials indicated that previous hikes have provided the central bank with time to evaluate economic conditions.