Federal Reserve keeps interest rates unchanged ahead of midterm elections

The Federal Reserve kept interest rates unchanged on Wednesday following a two-day policy meeting. UPI and msnbc.com reported that the decision by the Federal Open Market Committee keeps the central bank rate steady in its final meeting prior to the United States midterm elections. The news outlet msnbc.com noted that the key rate remains at about 3.9 percent, while UPI cited a target range of 3.75 percent to 4 percent. [1][2]

The central bank decided against an interest rate increase despite persistent inflation. According to UPI, the preferred inflation measure of the Federal Reserve increased to an annual rate of 3.7 percent in September, which is a four-month high and above the 2 percent target of the bank. Central bank officials stated that holding rates steady will allow the accumulation of more information to determine future policy moves, msnbc.com reported. [1][2]

The pause comes one month after central bankers moved to raise borrowing costs. UPI and msnbc.com both reported that the Federal Reserve hiked interest rates by 25 basis points, or a quarter of a percentage point, during its previous meeting last month. UPI noted that the increase last month was the first interest rate hike by the central bank in three years. [1][2]

The Federal Reserve System was created on December 23, 1913, with the enactment of the Federal Reserve Act to serve as the central banking system of the United States. It functions as an independent central bank designed to remain structurally insulated from political interference. [13]