Fed Holds Rates as AI Market Strains Add to Policy Balancing Act

The Federal Reserve held its benchmark rate steady on Oct. 28, keeping the target range at 3.75% to 4% as officials weighed elevated inflation against signs that borrowing conditions are already tightening. The decision came amid questions about how financial-market wobbles tied to AI investment could affect growth and the broader economy. The committee approved the hold by a 10–2 vote; Lisa Cook and Beth Hammack dissented, preferring a quarter-point increase. The Fed said inflation remained elevated and that more information would help it determine the appropriate policy stance, while describing economic activity as expanding at a strong pace and capital investment as robust. (Federal Reserve statement)