The Federal Reserve voted 10-2 to leave its benchmark interest rate unchanged at 3.75% to 4.00% on Oct 28, with Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of a 25 basis point increase. The decision pauses tightening after September’s unanimous quarter-point hike, even as the central bank upgraded its assessment of economic activity from a “solid” to a “strong” pace and reiterated that inflation remains elevated. The policy statement dropped language suggesting September’s hike would speed a return to its 2% inflation target, adding that “the accumulation of more information” will help determine the appropriate stance.

Cook’s vote marked her first dissent since joining the board in 2022 and surprised economists who viewed her as dovish, bringing the number of officials who have dissented for higher rates since July to four. Chair Kevin Warsh declined to signal a December move during his press conference, saying he does not believe in forward guidance absent a crisis and that quashing inflation relies on “new monetary medicine” rather than an individual calendar date. Warsh also said he was “unwilling and unable” to call financial conditions tight, noted that higher rates are affecting artificial intelligence and technology spending, and stated that “politics played no role” in holding rates six days before the US midterm elections.