The Federal Reserve left interest rates unchanged at its most recent policy meeting, saying it wants to see more economic data before deciding whether to adjust rates again.
The Fed's job is to balance two goals that are often in tension: keeping inflation low and keeping the job market healthy. It raises interest rates to cool down an overheated economy and lowers them to support growth when the economy is weakening. For much of the past two years, the central bank has been trying to bring inflation back down toward its long-standing target of 2 percent without causing a sharp slowdown in hiring or growth, a balancing act that has made each policy meeting closely watched by investors, employers, and anyone with a mortgage or a savings account.
In explaining last week's decision to hold steady, policymakers said that gathering more information would help the committee decide the right policy stance to keep inflation moving toward that 2 percent goal. That language signals the Fed is not committing in advance to either raising or cutting rates at its next meeting, and instead wants to see how upcoming data comes in first.
The next major piece of that puzzle arrives shortly: the government's reading on October consumer prices is due out on November 10, and it will be the last official inflation report the Fed has in hand before its final meeting of the year in December. That report will weigh heavily on expectations for whether the Fed cuts, holds, or raises rates again before year end, and markets are likely to react quickly to any surprise in either direction.
Watch the October consumer price index report due November 10 for the clearest signal yet on what the Fed is likely to do at its December meeting.
Why didn't the Fed just cut or raise rates now?
The Fed said it wants more economic data before committing to a direction, reflecting uncertainty about where inflation and the job market are heading.
What happens next?
The October inflation report due November 10 will be a key input for the Fed's final rate decision of the year in December.