In brief
In a 10‑2 vote, the Fed decided to maintain the benchmark rate, citing robust growth but persistent inflation. Chair Kevin Warsh warned inflation remains too high and hinted at future increases. The decision comes less than a week before U.S. midterm elections.
The U.S. Federal Reserve announced on Wednesday that it would keep the federal funds rate at its 3.75‑4.00% target range, a decision made in a 10‑2 vote by the 12‑member FOMC, just days before the 2026 midterm elections. Xinhua reported that the committee justified the pause by pointing to strong economic activity, resilient domestic spending and solid job gains, while noting that inflation remained elevated.
Official statements from the Fed highlighted robust productivity growth, robust capital investment, and a stable unemployment rate, but stressed that inflation had not yet returned to the 2% goal. Yonhap added that the Fed’s decision follows a recent quarterly raise by a quarter point and that rising oil prices keep inflation in check.
In a press briefing, Fed Chair Kevin Warsh said inflation was “too high.” He warned that energy and related prices have moved higher again in recent weeks and that price stability remains a priority.
“We are working to ensure that relative price changes in some sectors do not broaden out across the economy,” Warsh told the briefing.
“Energy and related prices have moved higher again in recent weeks, and our job is to ensure that relative price changes in some sectors do not broaden out across the economy.”
Warsh added that collecting more data would help the FOMC determine the policy stance needed to bring inflation back to its 2% target promptly. The Fed also announced a change to next year’s FOMC meeting schedule, with seven of the eight meetings earmarked for rate‑setting votes.
Kyodo News described the move as a cautious approach to inflation, noting that the Fed will observe economic conditions before any further rate adjustments. Markets had widely expected a hold, while analysts from Pacific Investment Management Co. had projected another quarter‑point hike later in December.
South Korea’s interest‑rate gap with the U.S. was reported at up to one percentage point, illustrating the continued monetary divergence between the two economies.
