Federal Reserve leaves interest rates unchanged despite rising inflation

The Federal Reserve on Wednesday voted to keep interest rates unchanged, its final monetary policy decision before the midterm elections.

The decision to hold rates steady came despite rising inflation that jumped from 3.4% in August to 3.7% in September.

A major driver of that inflation is the soaring cost of gas, diesel and crude oil. These higher prices have hit consumers hard and many economists say the spillover effect of rising gas prices has started to show up across the broader economy.

In its post-decision statement, the Fed acknowledged the problem that inflation is causing but said it needs more data before moving forward with a rate hike.

“Inflation remains elevated. The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal,” it said.

The Fed’s preferred inflation gauge, PCE, will not be released until Thursday, but it is expected to touch 3.7%.

Wednesday’s vote was not unanimous, unlike September’s 12 to 0 vote to hike rates, the first time the central bank increased its benchmark rate since 2023.

Two officials, governor Lisa Cook and Cleveland Fed president Beth Hammack dissented in favor…

Original source: https://www.nbcnews.com/business