Fed Holds Rates at 3.75%-4% as Two Officials Dissent in Favor of a Quarter-Point Hike

The Federal Reserve on Wednesday voted 10-2 to keep the federal funds rate target range at 3.75% to 4%, maintaining ample reserves in the banking system. Governors Lisa Cook and Beth Hammack, president of the Cleveland Fed, dissented, favoring a 25-basis-point rate increase at this meeting. The Fed said economic activity is expanding robustly, with household spending resilient, productivity and capital investment strong, and job growth keeping pace with labor force growth while the unemployment rate has changed little, even as geopolitical factors keep uncertainty elevated. The central bank said inflation remains elevated and that it will assess additional information to determine the appropriate policy stance, ensuring inflation returns to its 2% goal in a timely manner and emphasizing its commitment to price stability. The statement was labeled as continuing to update.