Fed holds rates steady, markets mostly follow suit
TLT•The Federal Reserve held its benchmark rate at 3.75%-4% in a 10-2 decision, while describing the economy as “strong” and inflation as elevated. US stock indexes were mixed, and Treasury yields edged higher after the announcement.
1. Fed holds rates steady
The Federal Reserve kept its benchmark interest rate in the 3.75%-4% range in a 10-2 decision, saying it would assess further data on inflation. The Fed said inflation “remains elevated” and upgraded its assessment of the economy to “strong” from “solid.”
2. Two officials dissent
Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of a quarter-percentage-point rate increase. The committee said more information would help determine the appropriate policy stance for returning inflation to its 2% goal.
3. Markets react
The Nasdaq composite fell 0.2%, while the S&P 500 rose 0.1%. Treasury yields were slightly higher: the two-year yield rose 3.9 basis points to 4.776%, the 10-year yield gained 5 basis points to 5.047%, and the 30-year yield rose 3.8 basis points to 5.338%. The dollar index was up 0.02%.
