Fed keeps interest rates steady: Decision made with a 10-2 vote

The U.S. Federal Reserve (Fed) kept the federal funds rate target range at 3.75-4 percent at the Federal Open Market Committee (FOMC) meeting. The decision was made with a 10-2 vote, with two officials voting in favor of an interest rate hike.

According to the statement from the Fed, the decision to keep the interest rate steady was made with a 10-2 vote. Fed Board Member Lisa Cook and Cleveland Fed President Beth Hammack voted against the monetary policy decision, stating that they favored a 25 basis point increase in the policy rate at this meeting. The FOMC decided to maintain the federal funds rate target range at 3.75-4 percent to support the Fed's dual mandate, while continuing the policy of maintaining sufficient reserves in the banking system.

It was reiterated that economic activity has been expanding at a strong pace and that domestic spending remains resilient, despite high levels of uncertainty stemming partly from geopolitical developments. Noting that inflation continues to run high, it was stated that incoming data will help determine the appropriate policy stance to ensure that inflation returns to the 2 percent target in a timely manner. The Fed cut rates by a total of 75 basis points in September, October, and December of last year, held the policy rate steady in the first five meetings of this year, and raised the policy rate by 25 basis points in September, marking the first rate hike since 2023.