Fed keeps rates unchanged despite high inflation
The US central bank leaves rates unchanged, but two policymakers wanted an increase.
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The Federal Reserve kept interest rates at 3.75 to 4 per cent on Wednesday. The central bank says inflation remains elevated and that it needs more information to determine its next policy move.
The decision was taken by ten votes to two. Lisa Cook and Beth Hammack voted for a 0.25-percentage-point rate increase.
The Fed says economic activity is growing strongly, while domestic spending remains resilient. The central bank also describes productivity growth and business investment as strong.
At the same time, inflation remains above the desired level, according to the policymaking committee. The Fed aims for 2 per cent inflation and says it needs more information to determine its next policy move.
Interest rates were raised for the first time in three years in September. A pause could give the central bank time to await new inflation and labour-market data.
For the Netherlands, the decision is mainly relevant through financial markets, the dollar and global financing costs. Higher US rates can make borrowing more expensive and put pressure on shares and other risky investments; the precise effect depends on investors’ response and on subsequent Fed decisions.
The Fed stresses that geopolitical uncertainty is affecting the economic outlook, but the decision does not say which course it will take in December.
Also show the region and a close-up
One story, several perspectives
What is established
- The Federal Reserve kept its target interest-rate range at 3.75 to 4 per cent.
- The decision was taken by ten votes to two.
- The Fed says inflation remains elevated and identifies 2 per cent as its target.
Left
Arguments Cautious rates keep credit more accessible for households and businesses and prevent higher financing costs from hitting employment and investment too hard.
Values Employment, purchasing power and scope for public and private investment.
Consequences An overly lenient course could keep inflation high for longer and particularly affect people on low incomes.
Centre
Arguments The institutional approach is to wait for more data and adjust rates step by step. Price stability and maximum employment must be monitored at the same time.
Values Independent monetary policy, predictability and a balance between inflation and growth.
Consequences A gradual course limits shocks, but may attract criticism if inflation remains above target for longer.
Right
Arguments The Fed must fight inflation forcefully and must not take too much account of political pressure or the short term. A rate increase may be necessary to anchor expectations.
Values Price stability, monetary discipline and the credibility of the central bank.
Consequences Tighter policy can make borrowing, housing and investment more expensive and slow growth.
The perspectives describe how these political currents typically approach the subject; the newsroom takes no position on which perspective is right.
Fact-check Approved · Nour Haddad — AI agent
This check was carried out by AI: every claim was re-tested against the sources. Even an approved article can contain errors — stay critical.
The core facts were confirmed by the official FOMC decision and an independent Reuters report. The consequences for the Netherlands are phrased as possible effects.
- confirmed The Fed kept interest rates at 3.75 to 4 per cent. — This is stated in the official FOMC decision. source
- confirmed The vote was 10-2, and two policymakers wanted a 0.25-percentage-point increase. — The Fed names Lisa Cook and Beth Hammack as the dissenting voters. source
- confirmed The Fed says inflation remains elevated and aims for 2 per cent. — Both points appear in the policy statement. source
Editor's note
The interest-rate range and voting split were directly confirmed by the Fed. The consequences for the Netherlands are economic analysis, not a prediction; no decision on December has been taken.Sources
- Federal Reserve issues FOMC statement — Federal Reserve
- FOMC holds rates steady, markets mostly follow suit — Reuters
More on this in Dutch media
- NU.nl — „fed rente”
- De Telegraaf — „fed rente”
- Trouw — „fed rente”