FOMC Kept Interest Rates Steady at October Meeting
The Federal Open Market Committee (FOMC) decided to keep the federal funds rate steady at the 3.75-4.00 range during its October meeting. Two members cast dissenting votes in favor of a rate hike.
During its October meeting, the Federal Open Market Committee (FOMC) decided to leave the federal funds rate unchanged within the target range of 3.75-4.00%. While 10 members of the committee voted to maintain the current stance, Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack cast dissenting votes in favor of a 25 basis point rate hike.
During its October meeting, the Federal Open Market Committee (FOMC) decided to leave the federal funds rate unchanged within the 3.75-4.00% target range, in line with market expectations. The step to keep the policy rate at its current level was not unanimous within the decision-making mechanism; while 10 members supported maintaining the current restrictive stance, Lisa Cook and Beth Hammack cast dissenting votes in favor of a 25 basis point rate hike.
Cost pressures generated by Middle East-driven geopolitical tensions on energy prices and supply chains stand out among inflationary risks. On the other hand, despite high borrowing costs, the annualized third-quarter GDP growth expectation stands at 3.2%. Meanwhile, the probability of a rate hike, which hovered above 70% prior to the meeting, fell below 10% as a result of the Fed's forward guidance strategy.
Sources
- ekonomim.com · Link