FOMC holds rates steady, markets mostly follow suit
TLT•The Federal Reserve held its benchmark interest rate at 3.75%-4% in a 10-2 decision, while saying inflation remains elevated and upgrading its assessment of economic growth. US stock indexes were mixed, and Treasury yields rose slightly after the announcement.
1. Fed holds rates
The Federal Reserve kept its benchmark interest rate within the 3.75%-4% range on Wednesday, with two policymakers dissenting in favor of a quarter-percentage-point increase. The central bank said inflation remains elevated and upgraded its assessment of the economy to “strong” from “solid.”
2. Markets react
The Nasdaq Composite fell 0.1% and the S&P 500 rose 0.1% after the decision. The 2-year Treasury 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 increased 3.8 basis points to 5.338%.
3. Further tightening debated
The Fed said more information would help determine the appropriate policy stance for returning inflation to its 2% goal. Some analysts expected rate hikes to resume in December, while the central bank said future decisions would depend on incoming data.
