By Jeff Cox
A divided Federal Reserve on Wednesday voted to keep its benchmark interest rate steady, despite a barrage of criticism from President Donald Trump and dissents from two top officials.
The Federal Open Market Committee, the group that sets the overnight borrowing rate, voted 9-2 to stay on hold. The federal funds rate will continue to be set in a range between 4.25%-4.5%. The level sets what banks charge each other for overnight lending, but influences a slew of other rates across the economy.
However, the decision met opposition from Governors Michelle Bowman and Christopher Waller, both of whom have advocated for the Fed to start easing in acknowledgement that inflation is under control and the labor market could start weakening soon. This was the first time since late 1993 that multiple governors cast no votes on a rate decision.
The post-meeting statement offered only a couple changes in how the committee views economic conditions.
“Although swings in net exports continue to affect the data, recent indicators suggest that growth of economic activity moderated in the first half of the year,” the document stated. “The unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated.”
At the June meeting, the committee had a more optimistic view, saying the economy “continued to expand at a solid pace.”
The Wednesday statement said uncertainty about conditions “remains elevated,” also a less upbeat assessment from June, which noted that uncertainty had “diminished but remains elevated.”
A slower economy would boost the argument for lower interest rates, though the committee stopped short of endorsing that view.
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