The US Federal Reserve held interest rates steady at 3.75% to 4% on Wednesday, its final decision before midterm elections. Two of 12 board members voted to raise rates by a quarter point instead.
Fed Chair Kevin Warsh stated that politics played no role in the pause. "Politics played no role in the decision. I didn't hear an utterance about politics," Warsh said during a press conference.
The Fed raised rates for the first time since 2023 last month. Inflation stood at 3.7% in September, above the Fed's 2% target and the central bank's preferred pause threshold of 3%.
Warsh described the board as "a heck of a family fight" when asked about Donald Trump's recent criticism of the Fed and his claim that Trump appointees had influenced policy. Trump previously said US interest rates should be "1% or less" and asserted the board was full of Democratic-appointed members who "would like to see the country do badly". Warsh declined to address Trump's specific claim but said he was "honored to be here, and I'm honored to be chairman of this group."
Multiple Fed officials have signaled recently that the central bank has room to pause rate hikes, even though most Fed economists predict one more increase before year-end.
Warsh said the Fed would assess incoming data to guide future policy. "The period right in front of us is information rich, there's a lot that's happening in the world, my colleagues and I are keen to take notice of it," he said.
The Fed also announced structural changes to its meeting schedule. Starting autumn 2027, only seven of its eight annual board meetings will set interest rates, declining to six in 2028, with remaining meetings focused on broader monetary policy.