The Fed Skips Interest Rate Hike, Again
The Federal Reserve kept its federal funds rate unchanged at a 22-year high of 5.25% to 5.5%.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
The Federal Reserve once again maintained its benchmark interest rate at the current 5.25% to 5.5% target range today in a widely expected move aimed at curbing inflation.
While recent indicators suggest that third-quarter economic activity expanded at a sizzling 4.9% annualized rate, inflation remains elevated, the central bank’s Federal Open Market Committee (FOMC) said in a statement on November 1 at the conclusion of its two-day policy meeting. The goal is to reach maximum employment and keep inflation at the 2% rate over the long run, the committee said.
If risks emerge that would impede that goal, the FOMC said it is prepared to adjust the stance of monetary policy as appropriate, taking into account factors including labor market conditions, inflation pressures and expectations, as well as financial and international developments.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
This is the second consecutive policy meeting in which the committee left rates unchanged, at a rate that is its highest in 22 years. Today’s move comes on the heels of the Labor Department’s report showing strong job growth, with 336,000 jobs added in September and 119,000 retroactively added to July and August’s total. Wage growth eased in September to 4.2%, which appears to be a trend, as Kiplinger previously reported.
The committee noted that job gains have moderated since earlier this year but remain strong and that the unemployment rate also remains low. It said it would assess additional information and its implications for monetary policy, taking into account cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.
No surprise to Wall Street
The FOMC also said it will continue to reduce its holdings of Treasury securities as well as agency debt and mortgage-backed securities, as previously announced.
The Fed's decision today was widely anticipated on Wall Street.
Frank Lietke, executive director and president of Ally Invest Securities, said in an emailed statement that the decision to maintain rates "provides small relief to consumers with variable funding sources."
He said that the pause is not a signal that consumers are out of the woods yet. "We should remain vigilant — strategic planning, differentiating between essential and non-essential expenses, and making smart decisions today can help consumers weather a potential recessionary storm,” Lietke said.
In September at the FOMC’s meeting, policymakers said that they expect stronger economic growth to keep interest rates higher for longer through much of the year.
In July, the FOMC raised rates by 25 basis points (0.25%), which brought the short-term federal funds rate to the target range of 5.25% to 5.5%. It was the 11th rate increase since March 2022 aimed at curbing inflation and followed a pause in June.
RELATED CONTENT
-
Dow Adds 1,206 Points to Top 50,000: Stock Market TodayThe S&P 500 and Nasdaq also had strong finishes to a volatile week, with beaten-down tech stocks outperforming.
-
Ask the Tax Editor: Federal Income Tax DeductionsAsk the Editor In this week's Ask the Editor Q&A, Joy Taylor answers questions on federal income tax deductions
-
States With No-Fault Car Insurance Laws (and How No-Fault Car Insurance Works)A breakdown of the confusing rules around no-fault car insurance in every state where it exists.
