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United States

Fed holds rates steady at 3.75% to 4.00% with two dissents favouring a hike

The decision keeps borrowing costs elevated while officials weigh persistent inflation, a choice that bears on lending, investment and the outlook for markets.

Photo: Yahoo Finance

What happened

The Federal Open Market Committee voted 10-2 to leave the federal funds rate unchanged at 3.75% to 4.00%. Real Estate News & Insights | realtor.com® Governors Lisa Cook and Cleveland Fed President Beth Hammack dissented, both voting for a quarter-point increase. Real Estate News & Insights | realtor.com® The committee said inflation remains elevated and that more information will help it decide the appropriate policy stance. Real Estate News & Insights | realtor.com® Fed Governor Christopher Waller said he would support a quarter-point hike at the December meeting, and markets raised the odds of such a hike to 96.3% after his remarks. Ground News Fed Chairman Kevin Warsh also said the committee will cut its scheduled interest rate votes to seven next year and six in 2028. Real Estate News & Insights | realtor.com®

Around it

Inflation has been stuck above the central bank's 2% target for more than five years, and the Iran war has added uncertainty to the economic outlook and pushed up energy prices. butlereagle.com The average credit card rate remains near 20% and mortgage rates are the highest since last August, so consumers may not feel much relief from the pause. butlereagle.com The committee's most recent projections targeted a year-end median federal funds rate of 4.1%, which would imply one more hike this year. Yahoo Finance

What comes next

The next Federal Open Market Committee meeting is scheduled for December 8 to 9. Yahoo Finance

Sources

  1. Real Estate News & Insights | realtor.com®Fed Pauses Interest Rate Hikes for Now as Key Midterm Elections Loom
  2. butlereagle.comFed leaves interest rate unchanged but with 3 dissents as Warsh praises ‘good family fight’
  3. Ground NewsFed Governor Waller sees December hike likely, opens door to possible half-point increase
  4. Yahoo FinanceIf the Fed Raises Interest Rates in December, I'm Making This 1 Investing Move

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