Adds Warsh comments, details, economy background
The US Federal Reserve on Wednesday held its target interest rate steady at 3.75-4pc, pausing after last month's hike as policymakers weighed renewed inflation pressures against signs of a softer US labor market.
The Federal Open Market Committee (FOMC) voted to keep the federal funds target range unchanged, saying the "accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee's 2 percent goal."
The vote to hold was 10-2, with governor Lisa Cook and Cleveland Fed president Beth Hammack dissenting in favor of an increase.
The decision by the FOMC was broadly expected even as policymakers had said in September they expected at least one more hike by the end of the year.
The Fed raised rates by 25 basis points in September to 3.75-4pc, its first increase since July 2023.
Fed chairman Kevin Warsh told reporters after the meeting Wednesday that Fed policymakers remain primarily focused on elevated inflation while describing US employment conditions as "positive".
The FOMC said in its statement that economic activity is expanding at a "strong pace" compared with a "solid pace" in the September statement. The statement Wednesday reiterated that "uncertainty remains elevated," largely due to geopolitical tensions, while domestic spending is "resilient" and capital investment is "robust".
After Wednesday's decision, the CME FedWatch tool showed an 82.6pc probability of a quarter point hike at the final meeting of the year in December.
The Fed has been balancing inflation pressures that are accelerating on Gulf war-related energy spikes against a cooling labor market. Consumer prices rose by 3.7pc in September from a year earlier, accelerating from a 3.4pc annual increase in August.
The labor market has shown signs of weakening. US employers added just 29,000 jobs in September, down from a downwardly revised 133,000 in August, while the unemployment rate edged up to 4.2pc, still near multi-decade lows.
