Fed Set to Pause Rate Hikes Despite Rising Inflation
US inflation is speeding up, yet the central bank looks set to wait. The Federal Reserve is expected to leave interest rates unchanged on Wednesday, 28 October, at its last meeting before next week's midterm elections, which decide control of Congress, the Guardian reported. The inflation rate rose to 3.7 percent in September, from 3.4 percent in August. Last month the Fed raised rates, citing rising inflation.
Last month's increase was the Fed's first since 2023. Inflation has stayed above the Fed's 2 percent target for years and above 3 percent for most of this year. It has largely been driven by the war with Iran: oil prices soared after the Strait of Hormuz, a key trade route, closed, and briefly topped 117 dollars a barrel this week, the highest in more than six months. Fed chair Kevin Warsh argues inflation has outlasted the war and the hike is meant to stop prices creeping higher.
Nicholas Economides, an economist at New York University's Stern business school, says higher rates cannot cure inflation caused by supply shocks and would only slow the economy. A pause may not end the hikes: most Fed economists expect one more increase before the end of the year.
After Wednesday's decision, voters choose a new Congress next week; polls name the economy as their top issue. Any further hike would come later: Fed governor Christopher Waller said this month that hikes "do not need to come at consecutive meetings."
The cards of this story
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The text gives solid figures and a dissenting expert view on the Fed's stance, but it mostly describes a problem and offers no real solution or progress.
The article is well sourced, with concrete inflation figures, oil prices and named voices such as Warsh, Waller and an economist. It also shows limits, noting that rate hikes cannot fix supply-driven inflation and that more increases may follow. What is missing is a solution or sign of progress: the central bank's pause is only a wait, not an answer. The score would rise if the text explained which measures could ease supply shocks or showed examples of what has worked.
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