The Federal Reserve held its benchmark interest rate unchanged at 3.75% to 4% on Wednesday 28 October, leaving September's quarter-point increase in place. The decision, taken by the Federal Open Market Committee, passed by 10 votes to 2, with Lisa D. Cook and Beth M. Hammack dissenting in favour of raising the range by a further quarter of a percentage point. The September increase had been the Fed's first rise in more than three years, lifting the range from roughly 3.5% to 3.75% to its current level.

A hold, with two dissents for a hike

The committee's statement was short and cautious. “Inflation remains elevated,” it said, adding that the accumulation of more information “will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee's 2 percent goal.” The inflation picture behind that caution is stark: consumer prices in September rose 3.7% from a year earlier, up from a 2.4% pace in February, before the war with Iran began, while producer prices were up 6.3%. The jobs data pointed the other way, with employers adding just 29,000 jobs in September and unemployment ticking up to 4.2% from 4.1% in August.

Warsh press conference is the next signal

Attention now turns to what comes next rather than to today's decision itself, which markets had widely anticipated, with futures putting the chance of a hold at about 90%. No updated economic projections were published at this meeting, so investors will parse Chair Kevin Warsh's press conference, due at 18:30 GMT, for clues about December, when another increase remains on the table. The hold also moves the rate debate beyond next week's midterm elections on 3 November, which will decide control of Congress.

Sources: The Edge (FOMC statement) and USA Today.