US interest rates held steady and economy grows - what it means for you — SkimNews
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- Federal Reserve held its federal funds target range at 3.75%-4%, saying inflation remained high and it wanted more information before changing policy again.
- Kevin Warsh said September's increase—the first in three years—was starting to work and that more data before the 8-9 December meeting would better determine the next policy stance.
- Lisa Cook and Cleveland Fed President Beth Hammack dissented from the 10-2 decision, voting to raise the range to 4%-4.25% rather than leave it unchanged.
- U.S. economy grew at an annualized 3.4% in the three months to September, beating analyst expectations as consumer spending rose 3.8% and private investment surged 19.4%, largely because of AI investment.
- U.S. inflation rose 3.7% in the year to September, above the Fed's 2% target, with fuel and energy prices surging because of the war in Iran.
- Federal Reserve said leaving rates unchanged makes new mortgage and business-loan rates less likely to change, while interest on cash savings is also unlikely to rise.
Why it matters: For borrowers, holding the target at 3.75%-4% means new mortgage and business-loan rates are less likely to change. For savers, the same decision means cash returns are also unlikely to rise as the Fed awaits more data before its 8-9 December meeting, with inflation at 3.7%.
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