Overview
- The Federal Reserve voted 10–2 on Wednesday to keep the target federal funds rate at 3.75%–4.00%, with Governors Beth Hammack and Lisa Cook dissenting in favor of an immediate 25 basis‑point increase.
- The FOMC said inflation remains elevated and that it needs more incoming information to determine the policy path needed to bring inflation back to the 2% PCE goal in a timely way.
- Officials changed the statement’s forward guidance language—shifting words such as “support” to “help,” replacing “timelier” with “timely,” and removing a line that justified the prior action—to preserve flexibility on future moves.
- Markets quickly priced a high chance of another hike in December, with the CME FedWatch tool and surveys showing roughly a 90% probability of a 25 basis‑point increase if incoming data stay strong.
- Policymakers pointed to higher energy costs, strong consumer spending and robust investment as reasons inflation has stayed above target; those trends could raise borrowing costs for households and businesses if the Fed tightens again.