The U.S. Federal Reserve on Wednesday kept its target range for the federal funds rate unchanged at 3.75 to 4 percent, less than a week ahead of the 2026 midterm elections.
"Economic activity is expanding at a strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little," said the Federal Open Market Committee (FOMC) in a statement.
Nevertheless, inflation remains elevated. In support of the Federal Reserve's dual mandate, "the Committee decided to maintain the target range for the federal funds rate at 3-3/4 to 4 percent," the FOMC said.
The committee reaffirmed "its policy of maintaining ample reserves in the banking system" and "price stability," 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."
Of the 12 FOMC members, 10 voted to keep the rate unchanged, while two favored a rate hike.
U.S. Fed holds interest rate steady ahead of midterm elections
