{"id":12170,"date":"2026-10-29T01:14:36","date_gmt":"2026-10-29T01:14:36","guid":{"rendered":"https:\/\/sotnews.agency\/?p=12170"},"modified":"2026-10-29T01:14:36","modified_gmt":"2026-10-29T01:14:36","slug":"us-fed-keeps-rates-unchanged-despite-elevated-inflation-gives-little-signal-of-next-move","status":"publish","type":"post","link":"https:\/\/sotnews.agency\/?p=12170","title":{"rendered":"US Fed keeps rates unchanged despite elevated inflation, gives little signal of next move"},"content":{"rendered":"
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U.S. Federal Reserve Chairman Kevin Warsh holds a press conference following a two-day meeting of the Federal Open Market Committee (FOMC), as the Federal Reserve holds interest rates steady, at the Federal Reserve, in Washington, D.C., Jul. 29. Reuters-Yonhap<\/p>\n<\/figcaption><\/figure>\n

WASHINGTON \u2014 The Federal Reserve kept its key rate unchanged Wednesday at about 3.9 percent despite stubbornly high inflation, while providing little hint about the central bank\u2019s next moves.<\/p>\n

\u201cInflation remains elevated,\u201d the Fed said in a statement released after its two-day policy meeting. Holding off on an increase will allow \u201cthe accumulation of more information\u201d that will help determine what policy the Fed should pursue \u201cto ensure a timely return of inflation\u201d to the central bank\u2019s 2 percent inflation target, the statement said.<\/p>\n

The Fed, led by Chairman Kevin Warsh, raised its benchmark rate last month for the first time in three years, defying President Donald Trump\u2019s demands for rate cuts, in an effort to get inflation back to its 2 percent target in a \u201ctimelier\u201d manner. The Fed is tasked by Congress to combat inflation, and it does so by lifting rates to slow borrowing and spending and cool price increases. The statement leaves the Fed\u2019s next moves unclear, even though officials last month penciled in another rate hike for this year. Wall Street investors have also priced in a rate hike in December, according to futures markets.<\/p>\n

The Fed\u2019s decision comes just six days before a midterm election that has focused heavily on concerns around the cost of living and affordability . Consumers have generally soured on an economy weighed down by more expensive gas, groceries, and clothing, among other items. Yet Warsh faces plenty of challenges in getting inflation back to target. Some of the forces pushing up prices \u2014 specifically the rapid buildout of artificial intelligence infrastructure and higher energy prices \u2014 won\u2019t easily be tamed by higher interest rates.<\/p>\n

Still, at a news conference following the announcement, Warsh said the Fed has \u201cstarted to see some changes in financial and credit conditions. They have tightened for some businesses and households.”<\/p>\n

Parts of the economy are being hit by higher rates, which were lifted by market forces, even before the Fed hiked last month. The average 30-year mortgage rate reached a three-year high of 7.4 percent earlier this month, though it has since slipped a bit. Higher mortgage rates have made buying a home unaffordable for 5 million more Americans since the beginning of the year, according to Oxford Economics, a consulting firm. Over time, Fed rate hikes can make mortgages, auto loans, and credit card borrowing more expensive, adding to Americans\u2019 sense that things like homes and cars are getting pricier.<\/p>\n

A separate inflation measure more closely followed by the Fed, the personal consumption expenditures price index, comes out Thursday and is forecast to have jumped 3.6 percent in September from a year earlier, up from 3.4 percent in August. Core prices, which exclude the food and energy categories, are forecast to have risen 3.1 percent, up from 3 percent the previous month. Earlier this month, the consumer price index showed inflation picked up in September, when consumer prices rose 3.7 percent compared with a year earlier.<\/p>\n

Two Fed officials dissented from Wednesday\u2019s decision, with Fed governor Lisa Cook and Federal Reserve Bank of Cleveland President Beth Hammack voting in favor of hiking rates by a quarter point. This is Cook\u2019s first dissent since she was appointed to the board by President Joe Biden in 2022.<\/p>\n

Cook has been targeted by the Trump administration, which tried to fire her last year, though the Supreme Court in June ruled she could keep her job while litigation played out. No president has fired a Fed governor before, a sign of the Fed\u2019s longstanding independence from day-to-day politics. Trump renewed his attempt to remove Cook last month by setting up a committee to look into allegations Cook committed mortgage fraud, which she has denied.<\/p>\n

President Trump has also slammed the Fed for raising its key rate last month, though he largely blamed the central bank’s rate-setting committee, rather than Warsh, whom he appointed.<\/p>\n

The Fed’s policy meeting is part of a busy week for central banks around the world. The Bank of Canada will also meet Wednesday and is forecast to lift its key rate a quarter point, to 2.5 percent. Policymakers at the European Central Bank and the Bank of Japan are both scheduled to meet Thursday and are expected to keep their key rates unchanged.<\/p>\n

For Warsh and the Fed, another key consideration is that the U.S. economy is growing at a healthy pace and unemployment remains low, at 4.2 percent, even if hiring is also sluggish. Warsh said growth in the July-September quarter likely rose above 3 percent. That would be up from 2.2 percent in the April-June quarter.<\/p>\n

Many economists argue that solid growth is evidence that interest rates aren’t particularly high and the economy could withstand higher rates to combat inflation. <\/p>\n

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U.S. Federal Reserve Chairman Kevin Warsh holds a press conference following a two-day meeting of the Federal Open Market Committee (FOMC), as the Federal Reserve holds interest rates steady, at the Federal Reserve, in Washington, D.C., Jul. 29. Reuters-Yonhap WASHINGTON \u2014 The Federal Reserve kept its key rate unchanged Wednesday at about 3.9 percent despite…<\/p>\n","protected":false},"author":1,"featured_media":12171,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":{"facebook_2277560469115098_106292521332774":"","twitter_aToxNzczMzI3Njk4OTg4ODUxMjAxOw==_1773327698988851200":""},"rop_publish_now_history":[],"rop_publish_now_status":"pending","_monsterinsights_skip_tracking":false,"_templately_pack_id":"","_templately_imported_at":"","_templately_source":"","_templately_import_session_id":"","footnotes":""},"categories":[16,14],"tags":[],"class_list":["post-12170","post","type-post","status-publish","format-standard","has-post-thumbnail","category-korea","category-trending-news"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t