Fed Lets Interest Rate Stand Ahead of Powell Nomination as Chairman
In its statement, the Fed said economic activity had been rising “at a solid rate despite hurricane-related disruptions.” It said
that the hurricanes had caused a drop in payrolls in September and a pickup in inflation because of higher gasoline prices, but that it expected both effects to be temporary, and that the storms would be “unlikely to materially alter the course of the national economy over the medium term.”
The last time the Fed met, in September, large parts of the United States were still reeling from hurricanes
that threatened to disrupt economic activity in several major cities.
The Fed’s preferred measure of inflation is well below the central bank’s 2 percent target; what’s more, inflation has slowed this year even as the unemployment rate has fallen, a trend
that would ordinarily be expected to put upward pressure on prices.
The vote was unanimous, and the central bank did not alter any of the careful wording in its statement about its expected rate of future increases — a sign
that it is not trying to quell widely held expectations of a rate increase of a quarter point in December.
WASHINGTON — The Federal Reserve left its benchmark interest rate unchanged on Wednesday
and signaled another rate increase is very likely to come in mid-December.
“A December rate hike is not a foregone conclusion,” Mr. Matheny said, adding that the market’s overwhelming confidence in an increase was “a puzzle
He said that the Fed was struggling to reconcile strong growth with weak inflation, and
that policymakers would be watching coming inflation data closely in making their interest-rate decisions.
