The Federal Reserve kept its benchmark interest rate unchanged on Wednesday, holding the target range at 3.75-4.00% after its October 27-28 meeting — but the 10-2 vote revealed an unusually sharp divide on the committee. Governors Lisa Cook and Beth Hammack both dissented, each arguing for another 25-basis-point hike instead of a pause.
The split follows the September 16 meeting, when the committee voted 12-0 for a 25-basis-point increase — the first hike of this tightening cycle. The dissenters’ push for more tightening, even as the majority paused, signals that inflation worries remain potent inside the building, particularly with the economy expanding at what Chair Kevin Warsh has called a “strong pace.”
Warsh defended the hold, saying it preserved the policy setting while the committee awaited an “accumulation of more information” before its next move. The interest rate on reserve balances now stands at 3.90%, effective October 29, with the primary credit rate at 4.00%. The next decision arrives on December 9, alongside fresh economic projections that will show whether the dissenters are winning the argument.
For borrowers, the pause offered no relief: the average 30-year mortgage rate sits around 7.32%, per Freddie Mac’s October 22 survey. With the economy growing at 3.4% and two policymakers already voting to tighten, markets are braced for a December decision that could go either way.
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Bhudev Bhagaliya is an experienced and senior journalist who has carved a distinct niche for himself in the world of Hindi journalism through his profound understanding and precise writing style. With over two decades of experience in the field of journalism, he has held key responsibilities at Dainik Hindustan for 12 years and at Amar Ujala for one year. Currently, he serves as the Content Editor for the Jagrook Youth News newspaper and portal, where he plays a crucial role in ensuring the quality and credibility of the news content. Bhudev Bhagaliya consistently writes about issues that help raise awareness within society and among the younger generation.