The Fed Holds at 3.75%–4%, but Two Officials Wanted a Hike: What Warsh's Decision Means for Your Mortgage and Savings

The central bank kept rates steady on Wednesday in a 10–2 vote. Chairman Kevin Warsh says inflation has been above target for close to six years, markets are bracing for a December move, and Thursday's PCE report is next.

By Clara Hughes

The Federal Reserve left its benchmark interest rate unchanged on Wednesday, holding the federal funds target range at 3.75% to 4%. But the decision was not unanimous, and the dissents tell you where the debate inside the central bank is heading. The Federal Open Market Committee voted 10–2 to hold. The two dissenters — Governor Lisa Cook and Cleveland Fed President Beth Hammack — both wanted a quarter-point rate increase, according to the Fed's statement. For Americans 45 and older — homeowners, savers and retirees — the message is that borrowing costs are unlikely to come down soon, and could still rise. What the Fed said The statement struck an upbeat note on growth and a firm one on prices. "Economic activity is expanding at a strong pace," the Committee said. It added that "inflation remains elevated" and promised: "The Committee will deliver price stability." The Fed also set the interest it pays on bank