Fed Holds Rates 3.75-4% Ahead of Midterms

On Wednesday, the Federal Reserve froze rates at 3.75% to 4% just six days before the U.S. midterm elections. The 10-to-2 vote left Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting, with Cook's surprise vote turning heads. Fed officials added a line that more data will guide the 2% inflation goal, replacing month's emphasis on a return. The Fed said economic activity was expanding at a strong pace, up from the solid outlook in September. September's 3.7% consumer price rise, driven by gasoline, and a 2.6% core inflation beat forecasts, kept the committee's focus sharp. Fed Chair Kevin Warsh, who raised rates since 2023, said he doesn't prejudice meetings, keeping the next move a mystery. With the midterm election looming, the Fed's decision signals it will wait for clearer data before nudging rates up again.