Federal Reserve holds interest rates steady

The Federal Reserve kept interest rates unchanged Wednesday as the economy faced a monthslong surge in inflation ahead of the midterm elections.

Fed Chair Kevin Warsh said at a Wednesday news conference in Washington, D.C., that policymakers had left rates unchanged while awaiting further economic data.

The benchmark interest rate stands between 3.75% and 4%. It is substantially below its recent peak reached in 2023, but remains well above the zero rate established at the beginning of the COVID-19 pandemic.

The central bank raised rates by a quarter of a percentage point last month to counter rising prices. That was its first rate increase in three years.

Prices in September were 3.7% higher than a year earlier, leaving inflation more than a percentage point above the Fed's 2% target.

The rate increase is expected to help curb inflation by slowing the economy and reducing demand. Such policy moves typically take several months to produce results.