Fed Holds Rates at 3.75%-4.00% in 10-2 Vote; Cook and Hammack Dissent, Seeking a Quarter-Point Hike

The Federal Reserve held its benchmark federal funds rate target range at 3.75%-4.00% on Thursday, a decision approved 10-2, with governors Lisa D. Cook and Beth M. Hammack dissenting in favor of a quarter-point increase. The vote marks a shift from September, when the committee raised rates by 0.25 percentage point in a unanimous 12-0 decision — its first hike in three years. The October statement said economic activity is expanding at a "strong" pace, upgrading September's "solid" language, citing resilient domestic spending, strong productivity growth and firm capital investment. It noted job gains have kept pace with the labor force and unemployment was little changed, while inflation remains elevated. The committee said it will be able to further assess the appropriate policy stance as it gathers more information, replacing September's language that the prior action would help return inflation to the 2% goal in a timely manner.