The Federal Reserve voted Wednesday to leave its benchmark interest rate unchanged at 3.75 to 4 percent, a decision that means Americans will see no immediate relief on mortgages, car loans or credit card balances just days before the midterm elections.
The vote was 10-2. Two members of the Federal Open Market Committee dissented, arguing instead for an additional quarter-point increase to further combat inflation: Cleveland Federal Reserve President Beth Hammack and Fed Governor Lisa Cook.
Hammack’s dissent puts Ohio at the center of an internal Fed debate over how aggressively to confront price pressures that officials themselves admit have proven more stubborn than expected.
The central bank’s own statement noted the broader economy is still expanding and consumers are still spending, even as inflation remains above target.
Fed Chairman Kevin Warsh addressed the decision at a press conference Wednesday afternoon, acknowledging the toll years of elevated prices have taken on households nationwide.
“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 factor behind the decision to hold steady this time, saying the earlier increase has already made borrowing more costly for businesses and individuals. That effect, he said, gives the committee reason to assess the impact before considering any further move.
Another rate increase remains on the table when the Fed’s policymakers meet again in December, leaving open the question of whether officials like Hammack and Cook will eventually get the tighter policy they pushed for this week.
