The Federal Reserve voted 10-2 to keep policy rates unchanged; governors Cook
and Hammack dissented, preferring a 25bp hike. Hammack, who last backed
tightening in July, said she favors a smaller near-term move to avoid larger,
potentially more disruptive hikes later; Cook’s dissent is her first since
joining the FOMC over four years ago. Two officials who voted with Hammack in
July backed the majority on Wednesday. Chair Kevin Warsh will discuss the
decision at a press conference; investors will watch how officials reconcile the
hold with Warsh’s summer pledge to bring inflation back to 2% “more timely,”
especially after another month of firm price data and amid renewed risk of
conflict in Iran.
