Two Fed officials wanted a hike even as federal reserve holds interest rates steady while inflation remains high

A divided vote on rates

The Federal Open Market Committee voted to leave the benchmark rate unchanged. Ten members supported holding steady, while Lisa Cook and Beth Hammack favored a 0.25-percentage-point increase. The Fed had raised borrowing costs in September to push inflation lower. Its benchmark rate is the central bank’s main tool for stabilizing consumer prices, which have risen in recent months.

Inflation remains a concern

In its statement, the Fed said economic activity was expanding at a “strong pace” and recognized that inflation remained elevated. Last month, the Consumer Price Index rose 3.7% over the year. Core inflation, which excludes volatile food and energy prices, increased 2.6% from a year earlier; both figures exceeded economists’ expectations.

Energy costs and consumer borrowing

The Iran war has kept global energy costs high, complicating efforts to bring inflation down. Fed Chairman Kevin Warsh has stressed the central bank’s commitment to price stability since succeeding Jerome Powell in May, and has pledged to return inflation to its 2% target.

Although the Fed left rates unchanged, some consumers could still face higher borrowing costs. Matt Schulz, LendingTree’s chief consumer finance analyst, said some loan rates may continue to rise as the holiday shopping season approaches.

Warsh to discuss the decision

Warsh is scheduled to address the decision at a press conference at 2:30 p.m. EDT. His remarks will follow the committee’s split vote and the Fed’s acknowledgment that inflation remains elevated.