Fed holds off on November rate hike

The Federal Reserve will hold interest rates steady for another month and praised the economy’s “solid” growth, the central bank’s policy arm announced Wednesday,

The Federal Open Markets Committee is keeping the money market interest rate range between 1 to 1.25 percent, opting against a raise. The Fed last hiked rates in June, the second hike of 2017.

The FOMC said the overall economy has continued to improve, with the unemployment rate continuing to fall even after the summer hurricanes that caused widespread economic disruption.

“Although the hurricanes caused a drop in payroll employment in September, the unemployment rate declined further,” said FOMC. “Household spending has been expanding at a moderate rate, and growth in business fixed investment has picked up in recent quarters.”

Fed officials are mulling how quickly to raise interest rates back toward historical averages as inflation sticks below the bank’s target range.

{mosads}The Bureau of Labor Statistics consumer price index (CPI), the Fed’s preferred measure for inflation, showed in September a 2.2-percent price increase over the past year.

Some of the Fed’s liberal members have expressed concerns about raising the interest rate range too quickly, restricting the money supply and driving down inflation. Fed hawks have insisted that the bank must bring rates quickly within higher historic averages to give the bank more room to respond to a financial crisis.

September’s report was the first month since February to show inflation above the Fed’s 2 percent target, caused by spiking gas prices after hurricanes devastated major U.S. oil infrastructure.

“Inflation for items other than food and energy remained soft,” the bank said. “Inflation on a 12-month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee’s 2 percent objective over the medium term.”