US Federal Reserve holds rates steady days before the midterms as Trump-targeted Lisa Cook dissents in favour of 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 Reserve's rate-setting committee split 10-2 on Wednesday, leaving the benchmark federal funds rate unchanged at 3.75% to 4%, just days ahead of the November 3 midterm elections. The decision follows September's quarter-point increase — the first in three years — with markets now strongly anticipating another rise in December. Fed Chairman Kevin Warsh gave little guidance on the path ahead, even as annual inflation reached 3.7% in September and the Producer Price Index jumped 6.3%.
The two dissenting votes came from Lisa Cook and Cleveland Fed President Beth Hammack, both of whom backed an immediate quarter-point rate increase.
A December hike at the Fed's final 2026 meeting is heavily priced in by investors, with the Iran war keeping energy prices high and gas remaining above $4 a gallon for three months.
After Trump moved to dismiss Cook last year, the Supreme Court ruled in June that she was entitled to remain in her post for the duration of the legal challenge.
