Key facts
- The Fed held its benchmark rate at 3.75% to 4% at its final policy meeting before the midterm elections.
- Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of a quarter-point rate increase.
- The Fed said in its statement that inflation remains elevated and more information will help determine the appropriate policy stance.
- Warsh said the Fed will cut the number of rate-voting meetings from eight to seven next year and by two in 2028.
- Consumer prices rose 3.7% in September from a year earlier, up from 3.4% in August, per the report.
- Mortgage rates reached a three-year high of 7.4% earlier in October before easing slightly, per the report.
The Federal Reserve voted on Wednesday to keep its benchmark interest rate at 3.75% to 4%, leaving policy unchanged at its final meeting before the midterm elections. The decision followed a September increase, the central bank's first in more than three years, taken in a 12-0 vote.
Two officials dissented in favor of moving faster. Governor Lisa Cook and Cleveland Fed President Beth Hammack voted to raise rates by a quarter percentage point, according to NPR and NBC News. The dissent was the first for Cook, whom President Donald Trump is attempting to fire, NBC News reported.
In its statement, the Fed said inflation remains elevated and that the accumulation of more information will help the committee determine the policy stance appropriate to ensure a timely return of inflation to its 2% goal. Consumer prices rose 3.7% in September from a year earlier, faster than the 3.4% annual rate in August, the reports said.
At a post-meeting news conference, Warsh said real activity is clearly pointing in the right direction but inflation is too high. He said energy and related prices have moved higher again in recent weeks and that the Fed's job is to ensure relative price changes in some sectors do not broaden out across the economy. Warsh also said an information-rich period before the December gathering will help officials determine next steps, and he announced the Fed will reduce the number of rate-voting meetings from eight to seven next year and by two in 2028.
Dan North, a senior economist at Allianz Trade, told NPR that the inflation line is going up, not down. Economists at Morgan Stanley said the statement suggests the Fed might not be done tightening and that future hikes will depend on incoming data, NBC News reported. The Fed's preferred inflation gauge, the personal consumption expenditures price index, was due for release on Thursday and was expected to reach 3.7%, NBC News reported.
NPR reported that mortgage rates climbed to a three-year high of 7.4% earlier in October before easing slightly, and that investment in artificial intelligence has continued to support parts of the economy less sensitive to rates.