Fed Holds Interest Rates Steady as Economy Shows Resilience, Inflation Remains Elevated

In its decision to keep interest rates unchanged this month, the Federal Reserve said that although inflation remains elevated, it wanted to gather more information before deciding whether to adjust rates again.

The Fed also noted that, despite uncertainty, the U.S. economy remained resilient.

Warsh acknowledged that inflation remained too high, but pointed to other signs, such as tightening credit conditions, that the economy was moving in the right direction.

There is more economic data to come before the committee’s next meeting, the Fed chair added, which should provide a clearer picture of the state of the economy.

At that point, Warsh said, “we’ll be, I think, better positioned to determine the right policy decision and the stance of policy.”

Although last month the committee signaled there could be one additional rate increase this year, Warsh declined to be drawn out on where policymakers might stand in six weeks’ time.

“A lot of things can happen, so I’m not going to be able to share with you my musings.”

The decision to hold rates steady was not unanimous.

While 10 of the 12 committee members voted to keep rates unchanged, Governor Lisa Cook and Cleveland Fed President Beth Hammack voted to raise rates to 4%-4.25%, from its current 3.75%-4%.

The Fed’s next meeting will be held over 8-9 December.

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