Fed Holds Rates at 3.75% to 4% With Two Dissents as Markets Await U.S. Data

Key Facts

The Federal Reserve held its target range for the federal funds rate at 3.75% to 4% at its October 28 meeting, in a decision approved by a 10-to-2 vote. The decision leaves short-term borrowing costs unchanged as markets monitor the course of U.S. monetary policy and its impact on risk assets, including cryptocurrencies. Available data did not establish that Bitcoin moved or declined after the decision, so its movements cannot be linked to it. The committee said in its statement that it had decided to "maintain the target range for the federal funds rate at 3.75% to 4%." The vote came as the Fed assessed economic activity and inflation, both of which factor into its monetary policy stance.

Lisa D. Cook and Beth M. Hammack dissented from the decision to hold rates, preferring to raise the target range by a quarter of a percentage point at the meeting. That means the two members favored tightening policy instead of maintaining the existing level, while the hold received support from a majority of the committee. The Fed statement named the two dissenters and specified their preferred direction and the size of the increase they proposed. The split adds information about differing views within the committee at the meeting, without changing the range that was ultimately approved.

The Fed described economic activity as expanding at a solid pace and said domestic spending remained resilient. It added that uncertainty remained elevated in part because of geopolitical developments, factors the statement cited in its assessment of the economic environment. The committee said that "economic activity has been expanding at a solid pace" and that "domestic spending has been resilient." At the same time, the statement affirmed that inflation remained elevated and that the accumulation of further information would help the committee determine the appropriate policy stance. This assessment of the economy and inflation frames the decision to hold rates, without offering a specific forecast for the next decision.

An Investing.com report published on October 29 points to a broader decline in the cryptocurrency market alongside weaker risk appetite, amid mixed results from technology companies in the United States and Asia. The site said Alphabet and Samsung results added pressure to investor sentiment, and cryptocurrency prices fell alongside Bitcoin. It also said the U.S. 10-year Treasury yield returned to trading above 5%, after briefly jumping following the Fed meeting. According to the same report, Ethereum fell 1.5% to $2,316.64, while XRP declined 2.2%. This information does not establish that the Fed decision alone caused moves in cryptocurrencies or bonds.

According to Investing.com, market pricing for a quarter-point rate increase in December rose to 79.8% on October 29, from 73.4% a week earlier. This reflects a rise in the market-implied probability over a week, while the Fed left rates unchanged at its latest meeting. These percentages reflect market pricing and are not a decision by the committee. The U.S. Bureau of Economic Analysis is scheduled to release its advance estimate of third-quarter GDP and September personal income and spending data on October 29 at 8:30 a.m. The Fed also scheduled the release of minutes from its October 27 and 28 meeting for November 18, and its next meeting for December 8 and 9, with a press conference on December 9.