The Fed Keeps Interest Rate at 3.75%-4.00%

The Fed left the target rate range unchanged at 3.75–4.00% on Wednesday with a vote of 10 to 2. Governor Lisa Cook and Cleveland Federal Reserve Bank President Beth Hammack dissented, proposing another quarter-point increase.

Bitcoin barely reacted: in the first minutes after the announcement at 2:00 PM Eastern Time, it rose by about 0.2% to around $80,950. CME FedWatch estimated the probability of maintaining the rate at about 90% before the decision.

In September, the Fed raised the rate for the first time since 2023 unanimously, with 12 votes to none. "Economic activity is expanding at a strong pace," the October statement said, which is stronger than the September wording of "solid" pace. Inflation remains elevated, and "the accumulation of additional information will help the Committee determine the policy course" to bring inflation back to 2%.

Two dissenting votes

Hammack voted against in July as well, when the rate was maintained at a 9-3 ratio, joined by Neel Kashkari and Lorie Logan. Now they supported the majority, leaving two dissenters instead of three.

Consumer prices rose by 3.7% over the 12 months through September, with gasoline prices up 9.1% for the month. The yield on 10-year Treasury notes closed at 4.99% on Tuesday after peaking at 5.31% on October 5. Bitcoin briefly exceeded $81,600 earlier on Wednesday but remained below the resistance of 81,000–82,500.

December and new data

Before the decision, traders estimated the probability of another increase on December 8-9 above 70%. The September minutes show that most officials considered an additional increase appropriate by the end of the year. The employment report will be released on November 6, and inflation data on November 10.