The United States Federal Reserve is set to hold interest rates steady in its final monetary policy decision before the US midterm elections. The central bank will maintain rates at 3.75-4 percent, following a 10-2 vote, in line with expectations. CME FedWatch, which tracks the likelihood of monetary policy decisions, indicated that there was more than a 90 percent chance rates would remain unchanged.
Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.” The Fed noted how inflation continues to rise. It also added, “The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal.” The most recent Consumer Price Index (CPI) report showed the annual inflation rate increasing to 3.7 percent in September, up from 3.4 percent in August, with energy prices largely accounting for the monthly surge.
There were signs earlier this month that the central bank would maintain benchmark interest rates, with the Fed’s chair for supervision, Michelle Bowman, advocating a “wait and see” approach. Today’s Fed announcement follows an interest-rate hike rise last month, amid surging inflation – the first increase by the central bank since July 2023. The move drew criticism from US President Donald Trump, who has repeatedly pressed the Fed to cut rates since taking office.
At the time, he wrote on Truth Social that “interest rates in the United States should be 1% or less.” The Fed’s next monetary policy meeting is scheduled for December 8-9, when it will give its final rate decision of the year. Current forecasts point to a quarter-point interest rate increase.
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