Fed holds rate at 3.75⁠–⁠4.00%; two officials dissent for a hike

The Federal Reserve announced on Oct. 28 at 2:00 PM ET that it is keeping the target range for the federal funds rate at 3.75⁠–⁠4.00%. The Federal Open Market Committee (FOMC) voted 10⁠–⁠2. Two members dissented, preferring to raise the rate by a quarter of a percentage point.

The details

Lisa D. Cook and Beth M. Hammack cast the dissenting votes. The statement says economic activity is expanding at a strong pace, domestic spending has been resilient, and productivity growth and capital investment are strong. The unemployment rate has changed little. The committee says uncertainty remains elevated, partly because of geopolitical developments.

On inflation, the statement says it remains elevated and that more information will help the committee determine the stance needed to return inflation to its 2% goal. The Fed also continues its policy of maintaining ample reserves in the banking system.

It is the first meeting since September, when the Fed raised rates by 25 bp to 3.75⁠–⁠4.00%. We covered the minutes of that meeting, in which most participants saw another increase as likely by year-end.

What it means for the market

The two votes for a further increase show that part of the committee favors tighter policy. For bitcoin, as for other risk assets, the policy rate, Treasury yields and the dollar matter. We make no call on the market's first reaction after the release; for the current BTC price see the daily brief and the bitcoin page.