Fed holds rates at 3-3/4 to 4 percent in 10–2 FOMC vote

The Federal Open Market Committee voted 10–2 on October 28 to maintain the federal funds target range at 3-3/4 to 4 percent. Lisa D. Cook and Beth M. Hammack dissented, preferring to raise the range by 1/4 percentage point. The Committee also said it would continue maintaining ample reserves in the banking system.

The statement described economic activity as expanding at a strong pace, citing resilient domestic spending, strong productivity growth and robust capital investment. Job gains were said to have kept pace with the workforce, while the unemployment rate had changed little.

The policy tension is inflation: the Fed said inflation remains elevated and reiterated its 2 percent goal. Geopolitical developments were cited as one source of continuing uncertainty, while the Committee said it would use additional information to determine the appropriate policy stance.

The next read will depend on how inflation and labor-market data evolve before the FOMC’s next decision. The October split also leaves open whether the two dissenting members continue pressing for tighter policy if elevated inflation persists.