The Federal Reserve left interest rates unchanged at 3.75%–4.00%, pausing after September's 25-basis-point hike.
The decision came even as U.S. inflation reached 3.7%, well above the Fed's 2% target. The vote was 10–2, with Lisa Cook and Beth Hammack dissenting in favor of a 25-basis-point hike.
The Fed upgraded its assessment of economic activity from a "solid pace" to a "strong pace" and removed language suggesting its latest policy action would support a faster return to the 2% inflation target, emphasizing incoming data instead.
Markets had priced in less than 10% odds of a hike today but still expect higher rates in December. Attention now turns to Fed Chair Kevin Warsh for clues on the next move.