Fed leaves rates unchanged as expected, December hike looms

After the 2-day meeting, the FOMC decided, as expected, to leave interest rates unchanged at 0.25-0.5%. The central bank said that the case for an increase in rates has “continued to strengthen”, giving more signals of a rate hike over the next meetings, with market odds pointing to December. 

The statement contained minor changes compared to the previous meeting. It mentioned that inflation “increased somewhat since earlier this year” but is still below the target. 

The most important line, pointed toward a potential rate hike. “The Committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives”, said the Fed, that added the word “some” from the previous statement. 

From 3 to 2 dissenters

Two members, Loretta Mester and Esther George,  voted again against the decision and asked for a rate hike. Eric Rosengren, that at the September meeting also voted to raise rates, at today’s meeting decided to vote with the majority. 

Next meeting and minutes 

The minutes of the meeting will be release November 23 and the next meeting will be December 13/14. Traders attention now turns toward Friday’s NFP and to the presidential election.