Fed set to hold interest rates steady in last decision before midterms

US central bank last month raised rates for first time since 2023, in move that infuriated Donald Trump The US Federal Reserve is expected to leave interest rates unchanged on Wednesday during its last rate-setting meeting before the midterm elections, keeping rates at one of the highest pre-election levels seen in over 20 years. Last month, Fed officials raised rates for the first time since 2023, citing rising inflation.

Inflation has hovered for years above the Fed’s target rate of 2%, and for most of this year, the annualized inflation rate has remained above 3%.

Background: what a Federal Reserve rate decision changes

The Federal Open Market Committee assesses economic and financial conditions when deciding its policy stance. Its meeting statement and minutes serve different purposes: the statement communicates the decision, while the minutes provide a fuller account of the discussion. Reading the dated official documents helps distinguish an announced decision from a prediction about what the committee might do next.

This background explains the policy mechanism, not the outcome of the meeting described above. For that outcome, check the original report against the corresponding official statement. A forecast of a cut is not confirmation that a cut has happened, and a policy change does not establish what any individual lender will charge.

Background source: Federal Reserve overview of the FOMC.

Read the original report at The Guardian.