US Federal Reserve holds interest rates despite surging inflation, with Trump-targeted Lisa Cook among two dissenters demanding a hike
Asian stock markets rose on Wednesday, lifted by AI-related shares in Tokyo and Seoul, as investors also awaited a policy decision from New Zealand's Reserve Bank.
The Federal Open Market Committee split 10-2 in favour of holding the benchmark federal funds rate at 3.75% to 4%, brushing aside two hawkish dissenters who pushed for an immediate quarter-point rise. Fed Chairman Kevin Warsh offered little guidance on the central bank's next step, while markets edged higher on the decision. Investors now overwhelmingly expect a December hike, with the Iran war driving annual inflation to 3.7% — nearly double the Fed's 2% target.
Governor Lisa Cook, whom Trump attempted to dismiss last year and who now faces mortgage fraud allegations she denies, was among those voting for a rate rise.
Cleveland Fed President Beth Hammack joined Cook in dissenting; 12 of 18 FOMC officials had already pencilled in one further hike before year-end at the December meeting.
The Producer Price Index surged 6.3% over the 12 months through September, a warning signal that consumer costs could continue rising into the holiday season.
