The U.S. Federal Reserve has decided to hold its benchmark interest rate steady at 3.75 to 4.00 percent, following a rate hike in mid-September. The decision aligns with widespread expectations among economists, who had anticipated a pause in rate increases. The Fed's next meeting in December will be crucial, as markets predict further tightening of monetary policy.
Within the Fed, a strong majority of members, 16 out of 18, had signaled support for at least one more rate hike this year, with four favoring an even more aggressive tightening. For 2027, 14 members expect the key interest rate to reach at least 4.00 to 4.25 percent, with a slim majority forecasting a rate of 4.25 to 4.5 percent. Updated projections will be released at the December meeting.
Meanwhile, the European Central Bank is expected to maintain its deposit rate at 2.5 percent during its upcoming meeting in Frankfurt, despite rising inflation. Economists do not anticipate a rate hike from the ECB at this time.