For the first time since 1992, a Fed governor and president dissented together, as Kevin Warsh says the 'monetary medicine' is starting to work
The Federal Reserve held interest rates steady on Wednesday, six days before the midterm elections. Only two officials wanted to raise them, and one was Lisa Cook, the Fed governor President Donald Trump has tried to fire.
TL;DR
- The Federal Reserve's Federal Open Market Committee voted 10-2 to maintain interest rates at 3.75% to 4%.
- Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack were the two dissenting officials who favored a 1/4 percentage point rate hike.
- This is the first instance since October 1992 where both a Fed governor and a regional bank president dissented on the same side of a vote.
- Fed Chair Kevin Warsh indicated that while the current monetary policy is showing signs of working, the committee is in a 'waiting game' for more definitive clarity on its impact.
- Despite the decision to hold rates steady, some analysts believe a rate hike is likely in December due to persistent inflation data.
- The Fed upgraded its economic outlook, describing activity as 'expanding at a strong pace'.