Fed pauses before midterms as markets bet on December hike

The Federal Reserve on Wednesday held its benchmark interest rate between 3.75% and 4%, pausing after September’s increase while keeping the door open for additional hikes as inflation remains elevated. The Federal Open Market Committee (FOMC) approved the pause in a 10-2 vote, with Lisa Cook and Beth Hammack dissenting in favor of a 25 basis-point increase. “The Committee is continuing its policy of maintaining ample reserves in the banking system. Economic activity is expanding at a strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient,” the FOMC said in a statement. “Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated. 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. The Committee will deliver price stability.” Chair Kevin Warsh told journalists that gross domestic product growth for the first half of the year was revised to 2.4%, up from a prior esti...