FOMC holds rates steady, markets rise modestly
TLT•The Federal Reserve held its benchmark rate in a 3.75%-4% range in a 10-2 vote, citing elevated inflation and upgrading its economic assessment to “strong.” U.S. stock indexes rose 0.2% after the chair began speaking.
1. Rates held steady
The Federal Reserve kept its benchmark interest rate in a 3.75%-4% range in a 10-2 decision, saying inflation remains elevated and that it needs more information to determine its next policy move. Governors Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of a quarter-percentage-point hike.
2. Economic assessment upgraded
The Fed described economic activity as expanding at a “strong” pace, up from “solid” at its September meeting. It also said investment remained robust and job gains were keeping pace with the workforce, and said it would reduce its policy-meeting schedule starting next year.
3. Markets rise modestly
The Nasdaq composite and S&P 500 each rose 0.2% after the chair began speaking. Treasury yields moved in different directions: the two-year yield fell 3.8 basis points to 4.7%, while the 10-year yield rose 5 basis points to 5.042% and the 30-year yield increased 6 basis points to 5.367%.
