The Federal Reserve kept its benchmark interest rate unchanged Wednesday, following a rate increase in September—the first since 2023. Two officials dissented, preferring another quarter-point hike.
Inflation remains a concern for policymakers. The war with Iran has driven up energy costs, and increases are beginning to affect other goods and services. Fed officials are weighing persistent inflation against the burden that higher borrowing costs place on households.
Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack supported raising rates by a quarter point. Hammack also favored an increase at the Fed’s July meeting. Cook’s vote was her first dissent since joining the board four years ago.
Fed Chair Kevin Warsh also announced changes to the central bank’s policy schedule: the number of rate-setting meetings is expected to fall from eight to seven next year, then to six the year after.
For many families, credit-card and auto-loan debt remain major strains on household budgets, with little expected to change in the final quarter of the year.
Credit-card borrowers who carry a balance are likely to keep facing steep interest costs, regardless of whether the Fed holds rates or adjusts them in December. Bankrate credit-card expert Ana Staples said the average card rate is about 20%.
Cardholders can ask their issuer for a lower rate, but a small reduction may not be enough to make a balance manageable.
