Fed holds interest rates steady even as inflation remains stubborn
The Federal Reserve has decided to maintain current interest rates while signaling a continued commitment to fighting inflation. Policymakers are facing pressure from rising energy costs and economic data, with many expecting a rate hike in December.
Why it matters
Interest rate decisions directly influence borrowing costs for consumers and businesses, impacting the broader housing and credit markets.
The Federal Reserve opted not to raise interest rates Wednesday, but signaled that it's not retreating from the fight against stubborn inflation.
The central bank renewed its pledge to deliver price stability, a goal that's been made more difficult by a spike in energy prices tied to the U.S. war with Iran.
"Inflation remains elevated," the Fed's rate-setting committee acknowledged in a statement .
At its last policy meeting in September, the Fed raised rates for the first time in more than three years. Since then, data has shown inflation has continued to accelerate, with consumer prices in September up 3.7% from a year ago — a bigger annual increase than the previous month.
"It's 'wrong way," says Dan North, a senior economist at the insurance company Allianz Trade. "That inflation line is going up, not down."
Also covering this story
6 other newsrooms covered this event. We read each version separately.
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