The U.S. Federal Reserve kept its benchmark policy rate unchanged at 3.75%–4.00% on October 28, matching market expectations after a 25 basis point increase in September. The Federal Open Market Committee decision was not unanimous: policymakers voted 10 to 2, with Fed Board member Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of a 25 basis point hike.
In its post-meeting statement, the Fed upgraded its view of U.S. economic activity from expanding at a 'solid pace' to continuing at a 'strong pace,' while noting that geopolitical uncertainties remain high. It said productivity growth was strong, capital investment robust, and employment growth kept pace with labor force growth.
The central bank also adjusted its inflation language. Although it reiterated that inflation remains elevated, it removed the previous assertion that the rate decision would help inflation return to 2% more quickly. Instead, policymakers said additional economic data would help determine the appropriate monetary policy stance to bring inflation back to target in a timely manner, signaling a more data-dependent approach.
Ahead of the announcement, CME FedWatch data placed the probability of no change at 92.8% and a 25 basis point increase at 7.2%. Attention now shifts to Fed Chair Kevin Warsh's press conference. Before the decision, Bitcoin was trading around $80,500, Ethereum at $2,333, Solana at $101, and XRP near $1.31. Markets are also watching for the preliminary third-quarter GDP release and September PCE inflation data.
