US Fed Holds Rates Steady at 3.75-4%
The Facts
- The U.S. Federal Reserve left its benchmark interest rate unchanged Wednesday in a range of 3.75% to 4%, holding steady after September's increase. The Federal Open Market Committee approved the decision on a 10-2 vote, days before the Nov. 3 midterm elections.
- Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, favoring a quarter-point increase. It was Cook's first dissent in four years on the rate-setting committee, while Hammack also dissented in July in favor of tighter policy.
- Chairman Kevin Warsh said the Fed will still hold eight meetings a year, but will vote on interest rates at only seven of them in 2027, with one dedicated to broad monetary policy strategy. In 2028, six meetings will set policy and two will cover strategy.
Sources Split
LEFT
CENTER
RIGHT
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ESTAB
CRIT
CENTER
PRO
ESTAB
The Spin
Pro-government narrative
Patience beats panic when the last rate move is still filtering through the economy. Growth is strong, hiring is steady and credit conditions are already tightening, so jamming through back-to-back hikes would risk breaking something for no good reason. Waiting on a couple more jobs reports and a fresh inflation read is sound policy, not weakness.
Government-critical narrative
Sitting on hands while prices rip higher is how inflation gets baked in for a generation. Producer costs are surging, energy keeps punishing household budgets and the job market is nowhere near crisis, so another quarter-point is the obvious call. A central bank that flinches ahead of an election earns neither trust nor lower prices.
Narrative C
Both the Fed's outdated models excluding the dollar and calls for more rate hikes are wrong. Higher rates in this modern financialized economy do nothing but damage, as they can't fix supply-driven inflation while hurting small businesses and affordability. Incorporating the dollar's value into policy would better ensure price stability, growth and lower yields.
