FOMC holds rates steady as markets rise modestly
SPY•The Federal Reserve held its benchmark rate at 3.75%-4% in a 10-2 vote, citing elevated inflation and upgrading its economic assessment from “solid” to “strong.” US stock indexes rose 0.2% after Fed Chair Kevin Warsh began speaking.
1. Fed holds rates steady
The Federal Reserve kept its benchmark interest rate in a 3.75%-4% range on Wednesday, with two policymakers dissenting in favor of a quarter-percentage-point increase. The Fed said inflation remains elevated and that it needs more information to determine its policy stance.
2. Economic outlook upgraded
The Fed described economic growth as “strong,” up from “solid” at its September meeting. It said investment remained robust and job gains were keeping pace with the workforce.
3. Markets and rate outlook
US stock indexes rose 0.2% after Warsh began speaking. Treasury yields moved in mixed directions, while the dollar index edged down 0.02%. Some analysts expected another rate increase in December, while others said the Fed’s next move would depend on incoming data.
