Fed holds rates as stable labor market keeps December hike on track
The Federal Reserve held interest rates last week, but a December increase is widely expected as officials continue trying to tame inflation. That path would extend a gradual tightening cycle while the labor market remains stable.
File photo · The Federal Reserve’s Eccles Building, Washington · Mar 2011 · Federal Reserve · Public domain · Source & licenseThe story
The Federal Reserve decided against raising interest rates at its meeting last week. A December increase is widely expected as policymakers continue trying to tame inflation.
The decision followed a period in which the labor market has remained stable, leaving the Fed on track for a gradual approach to further rate increases rather than an abrupt shift in policy.
The immediate policy marker is the December meeting, when officials could raise rates again. The mechanism is direct: higher borrowing costs are intended to restrain demand and help bring inflation down.
The outlook remains contingent on incoming economic conditions. The labor market's stability supports the expectation of another increase, while the timing and pace of future moves remain tied to inflation and employment data.
The next focus is the December decision and the labor-market and inflation readings available before then.
Our read · Fri, Nov 6
The Federal Reserve held rates last week as a December increase remained widely expected to tame inflation.
Why. The setup turns on whether inflation remains persistent enough to justify another increase after last week's pause. A stable labor market supports continued policy tightening, but the read is balanced because the December move remains an expectation rather than a completed decision.
Both cases
What could change this view: A softer labor market or clearer cooling in inflation could remove the basis for a December increase.
Who reported it · 1
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Reported by NYT Business as Stable Labor Market to Keep Fed on Track to Raise Rates Gradually
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