Fed holds interest rates steady in last decision before midterms

Fed chair Kevin Warsh said politics played no role in pause of interest rate hikes, despite inflation remaining above 3%

The US Federal Reserve left interest rates unchanged on Wednesday during its last board meeting before the midterm elections, keeping rates at one of the highest pre-election levels seen in over 20 years.

Two out of 12 board members voted against the pause, preferring to raise rates by a quarter point this meeting, the Fed board said in a statement.

Last month, Fed officials raised rates for the first time since 2023, citing rising inflation, bringing rates to a range of 3.75% to 4%. Inflation has hovered for years above the Fed’s target rate of 2%, and for most of this year, the annualized inflation rate has remained above 3%.