The Federal Reserve elected not to raise rates at last week’s meeting, keeping rates in the range of 3.75 to 4 percent. The decision was not unanimous as two members thought a rate hike at this time would have been appropriate. The Fed did acknowledge that inflation remains well above its target, which is suggesting rates will rise in December.
Changes announced at the meeting included that the central bank will reduce the number of meetings at which it votes on interest rates from eight to seven next year, and to six in 2028. The rationale is a changed schedule will allow the Fed to use the non-voting meetings to discuss policy and improve the quality of its decisions.
The latest GDP data was released Thursday after the Fed met. It showed US economic activity grew by 3.4 percent in Q3 of 2026. That is up from the 2.2 percent reported in Q2. Growth was driven primarily by AI companies’ build out and consumer spending by high-income earners.