Fed holds benchmark interest rate at 3.75%-4%

The US Federal Reserve kept its benchmark interest rate unchanged at a range of 3.75% to 4% on Wednesday, weighing elevated inflation against strong economic growth, Anadolu Agency reported.

The Federal Open Market Committee approved the decision in a 10-2 vote, in line with the central bank’s dual mandate of maximum employment and stable prices.

Lisa Cook and Beth Hammack dissented, preferring to raise the target range for the federal funds rate by 25 basis points at the meeting.

“Inflation remains elevated,” the committee said, adding that it “will deliver price stability.”

“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,” it said.

The central bank said US economic activity was expanding at a strong pace, supported by resilient domestic spending, strong productivity growth and robust capital investment, despite elevated uncertainty linked partly to geopolitical developments.

Job gains had kept pace with the workforce and the unemployment rate had changed little, the Fed said. It added that it was continuing its policy of maintaining ample reserves in the banking system.