The Federal Reserve voted Wednesday to hold its benchmark interest rate at 3.75 to 4 percent, denying Americans any near-term relief on mortgages, car loans, and credit card bills just days ahead of the midterm elections.
The vote was 10-2. Two officials wanted to go further, not easier: Cleveland Federal Reserve President Beth Hammack and Fed Governor Lisa Cook both pushed for an additional quarter-point rate increase to put more pressure on inflation. Hammack, who leads the Cleveland Fed covering Ohio and the broader Fourth District, was the lone regional bank president to dissent.
The Fed’s statement described an economy still growing, with consumers still spending, but inflation still refusing to cooperate.
Fed Chairman Kevin Warsh addressed the decision directly at a press conference Wednesday afternoon.
“Americans, of course, are still dealing with inflation that has been running above the committee’s objective for close to six years,” Warsh said. “It’s our responsibility to get inflation down.”
Warsh pointed to the Fed’s September rate hike as a reason to pause now, noting it has already made borrowing more expensive for businesses and individuals. Officials want to see how that hike plays out in the economy before deciding whether to act again.
Another rate increase is still on the table when the Fed meets again in December. Until then, Americans carrying debt get no break, and the political fight over who’s to blame for high prices heads into Election Day unresolved.
