{"id":3452,"date":"2026-10-28T20:03:53","date_gmt":"2026-10-28T15:03:53","guid":{"rendered":"https:\/\/ipp-news.com\/?p=3452"},"modified":"2026-10-28T20:03:53","modified_gmt":"2026-10-28T15:03:53","slug":"us-fed-expected-to-hold-rates-steady-ahead-of-key-midterm-elections","status":"publish","type":"post","link":"https:\/\/ipp-news.com\/?p=3452","title":{"rendered":"US Fed expected to hold rates steady ahead of key midterm elections"},"content":{"rendered":"
\n

The US Federal Reserve will announce a decision on setting interest rates on Wednesday, with markets expecting the central bank to hold steady days ahead of crucial midterm elections, despite surging inflation.<\/strong><\/p>\n

The Federal Open Market Committee (FOMC) began its second day of deliberations on Wednesday morning, a Fed spokesperson said, with a decision due at 2:00 pm local time (1800 GMT), followed by a press conference by Chair Kevin Warsh.<\/p>\n

Policymakers voted at their last meeting in September to raise interest rates to a range between 3.75 and 4.00 per cent \u2014 the first hike in three years \u2014 to tackle inflation.<\/p>\n

The Fed has missed its long-term two-per cent target for inflation for more than five years, with households and businesses battered by sustained price increases.<\/p>\n

US President Donald Trump\u2019s war on Iran, launched in late February, has sent energy prices skyrocketing and fuelled domestic inflation, alongside his wide-ranging tariff policies.<\/p>\n

Prices have also been driven by an investment boom in artificial intelligence (AI) technology and the build-out of huge data centres to support it.<\/p>\n

The Fed\u2019s decision comes six days ahead of the November 3 midterm elections, in which the Democratic Party is seeking to wrest control of both houses of Congress from Trump\u2019s Republicans.<\/p>\n

Trump\u2019s handling of the economy has been a key issue throughout the campaign, with working-class households across the country struggling to make ends meet despite largely stable overall economic growth.<\/p>\n

US consumer inflation came in hotter than expected in September, clocking in at 3.7 per cent, edging back towards a three-year high established in May.<\/p>\n

Still, key policymakers at the Fed \u2014 including Warsh \u2014 have signalled that they did not see an urgency to raise rates again immediately.<\/p>\n

Speaking in Bangkok earlier this month, Warsh said that US economic conditions had \u201cbroadly conformed\u201d to policymakers\u2019 expectations, fueling speculation that the Fed may pause at the October meeting.<\/p>\n

Wendy Edelberg, senior fellow at the Brookings Institution, told AFP<\/em> that all the signs pointed to a hold.<\/p>\n

\u201cI would be very surprised if they raised interest rates just for starters so close to the election, but also given that so many of them have signalled that they\u2019re happy for a pause,\u201d she said.<\/p>\n

<\/a>\u2018Don\u2019t understand the logic\u2019<\/h3>\n

For Edelberg, however, a decision to hold after raising rates in September would potentially be contradictory, given the labour market \u2014 the Fed\u2019s other mandate \u2014 has been largely stable.<\/p>\n

\u201cIn terms of the economics of it, I don\u2019t totally understand the logic,\u201d she said.<\/p>\n

\u201cIf there was a reason to raise interest rates at the last meeting, I think that there\u2019s just as compelling an economic reason to raise interest rates at this meeting.\u201d<\/p>\n

The Fed has a dual mandate to maintain maximum employment while keeping inflation to its long-term target.<\/p>\n

It achieves this goal largely using one tool: the economy\u2019s key interest rate. Raising rates tends to cool inflation but can also dampen economic activity; lowering them can spur economic activity but also fuel inflation.<\/p>\n

The US unemployment rate has been largely stable around 4.2 per cent over the last year, with job growth mostly in positive territory \u2014 albeit driven by a few sectors.<\/p>\n

Loretta Mester, former head of the Cleveland Fed, agreed that current economic conditions allowed policymakers to press ahead with rate hikes now.<\/p>\n

\u201cTake advantage of the situation you\u2019re in today, which is pretty clear evidence of stability in the labour market, and clear evidence that inflation is still too high,\u201d she said.<\/p>\n

\u201cMove, given that you know you want to be moving more, take advantage of this meeting.\u201d<\/p>\n

Mester, who took part in FOMC meetings during her tenure at the Fed, insisted that the committee did not \u201ctake into account any kind of political issues\u201d when it debated monetary policy.<\/p>\n

<\/a>Attacks on Fed<\/h3>\n

Still, Trump has loomed large over the Fed since he returned to power last year.<\/p>\n

In his second term, he has led an unprecedented assault on the Fed\u2019s independence, pursuing criminal charges against Warsh\u2019s predecessor Jay Powell and attempting to fire Fed Governor Lisa Cook as he demanded lower interest rates.<\/p>\n

While the probe against Powell was dropped to smooth the way for Warsh\u2019s Senate confirmation, the White House has recently renewed its drive to fire Cook \u2014 despite a Supreme Court decision that batted back an earlier attempt.<\/p>\n

\u201cI don\u2019t think it\u2019s going to stop because I think it\u2019s in the nature of this administration to continue those attacks,\u201d said Mester.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The US Federal Reserve will announce a decision on setting interest rates on Wednesday, with markets expecting the central bank to hold steady days ahead of crucial midterm elections, despite surging inflation. The Federal Open Market Committee (FOMC) began its second day of deliberations on Wednesday morning, a Fed spokesperson said, with a decision due at 2:00 pm local time (1800 GMT), followed by a press conference by Chair Kevin Warsh. Policymakers voted at their last meeting in September to raise interest rates to a range between 3.75 and 4.00…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-3452","post","type-post","status-publish","format-standard","hentry","category-english"],"gutentor_comment":0,"_links":{"self":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/3452","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3452"}],"version-history":[{"count":0,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/3452\/revisions"}],"wp:attachment":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3452"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3452"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3452"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}