Fed Holds Rates Steady as Targeted Governor Cook Casts First Dissent

Fed Holds Rates Steady as Targeted Governor Cook Casts First Dissent

A 10-2 vote keeps the range at 3.75 to 4 percent

The Federal Reserve held its benchmark rate steady on October 28, voting 10-2 to keep the federal funds rate in a range of 3.75 to 4 percent. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, both preferring a quarter-point increase at this meeting.

Statement cites elevated inflation and need for more data

The post-meeting statement said inflation "remains elevated" and that "the accumulation of more information" would help the committee set policy to return inflation to its 2 percent goal in a timely way, adding that it "will deliver price stability." The pause follows a unanimous quarter-point hike in September, the central bank's first rate increase since July 2023.

Cook's first dissent meets Hammack's second

It was Cook's first dissent since she joined the board in 2022. Hammack dissented in favor of a hike in July as well. The joint dissent by a governor and a regional bank president on the same side was the first since October 1992. Dallas Fed President Lorie Logan, who has called for a series of increases, did not dissent.

Warsh stresses resolve and distance from politics

Chair Kevin Warsh, who took over in May for a four-year term, said at his 2:30 p.m. ET news conference that the "monetary medicine" was starting to work and that the Fed would restore price stability "no ifs, ands or buts." With the decision landing six days before the midterm elections, he said "politics played no role in the decision." He also announced fewer rate-setting meetings: seven next year, down from eight, and six the year after.

A hike camp led by the governor Trump wants out

President Donald Trump, who nominated Warsh, has long demanded much lower rates and has tried to remove Cook from the board, renewing that push this month. The administration had warned against a hike before the midterms. Inflation has run above the 2 percent target for more than five years and is edging back toward the three-year high reached in May, driven by rising oil prices and strong consumer spending. Futures traders priced a 93 percent chance of a hold and a 78 percent chance of a December hike, according to CME FedWatch, while the 10-year Treasury yield stayed above 5 percent.