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The decision came days before the US midterm elections, with rising living costs, including higher petrol and grocery prices, a major concern for households.
US Federal Reserve Chair Kevin Warsh speaks during a press conference following the Federal Open Market Committee’s interest-rate decision in Washington. (AFP photo)
US Federal Reserve Chair Kevin Warsh on Wednesday denied that politics influenced the central bank’s decision to keep interest rates unchanged, insisting that discussions during its policy meeting focused on economic conditions rather than the upcoming midterm elections.
“Politics played no role in the decision,” Warsh told reporters after the Fed announced it would maintain its benchmark interest rate at around 3.9%, keeping it within a target range of 3.75% to 4%.
“I didn’t hear a reference to politics, elections, what’s happening in the next week or so,” he added.
The decision came days before the US midterm elections, with rising living costs, including higher petrol and grocery prices, a major concern for households. US President Donald Trump has repeatedly called for lower interest rates, putting the Fed’s independence under scrutiny.
Fed Holds Rates As Inflation Remains High
The central bank kept rates steady despite persistent inflation, saying more information was needed before deciding its next move.
“Inflation remains elevated,” the Fed said in its statement after a two-day policy meeting. It added that gathering more information would help officials determine how to bring inflation back to its 2% target.
The Fed raised its benchmark rate in September for the first time in three years, aiming to curb price rises by making borrowing more expensive and slowing spending.
Warsh also acknowledged that inflation remained a concern for households facing higher fuel costs.
“Inflation is too high,” he said, while maintaining that the central bank’s measures were beginning to have some effect.
Fed Says Tighter Credit Could Help Cool Demand
Warsh said the “overwhelming consensus” among Fed officials was that their policies were “starting to work some”. He pointed to tighter credit conditions for some businesses and households as evidence of the impact.
Higher borrowing costs could also slow investment by major technology companies building data centres to support artificial intelligence, he said.
“Do interest rates matter? I believe they do, and I don’t think they’re divorced from the rest of the economy,” Warsh said.
The Fed’s next steps remain uncertain, with investors and economists watching inflation and employment data for clues about a possible rate increase at its December meeting.
(With inputs from agencies)
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Ask News18The US Federal Reserve decided to maintain its benchmark interest rate within a target range of 3.75% to 4%, keeping it steady at around 3.9%.
Ask News18United States of America (USA)
October 29, 2026, 01:24 IST
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