Federal Reserve keeps rates unchanged despite high inflation

WASHINGTON — The Federal Reserve kept its key rate unchanged Oct. 28 at about 3.9% despite elevated inflation, while providing little hint about the central bank’s next moves. “Inflation remains elevated,” the Fed said in a statement released after its two-day policy meeting. Holding off on an increase will allow “the accumulation of more information” that will help determine what policy the Fed should pursue “to ensure a timely return of inflation” to the central bank’s 2% inflation target, the statement said. The Fed, led by Chairman Kevin Warsh, raised its benchmark rate last month for the first time in three years, defying President Donald Trump’s demands for rate cuts, in an effort to get inflation back to its 2% target in a “timelier” manner. The Fed is tasked by Congress to combat inflation, and it does so by lifting rates to slow borrowing and spending and cool price increases. The statement leaves the Fed’s next moves unclear, even though officials last month penciled in another rate hike for this year. Wall Street investors have also priced in a rate hike in December, according to futures markets. Whether the Fed is still leaning toward another hike will likely be a key issue in the news conference held by Fed Chairman Kevin Warsh this afternoon. The Fed’s decision comes just six days before a midterm election that has focused heavily on concerns around the cost of living and affordability. Consumers have generally soured on an economy weighed down by more expensive gas, groceries, and clothing, among other items. Yet Warsh faces…

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