(LEAD) Fed holds key interest rate steady after last month's quarter-point hike

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By Chang Dong-woo

WASHINGTON, Oct. 28 (Yonhap) -- The U.S. Federal Reserve on Wednesday held its benchmark interest rate steady, following the central bank's quarter percentage point hike last month.

During the two-day Federal Open Market Committee (FOMC) meeting, the Fed decided to maintain the rate at the 3.75-4.00 percent range in a 10-2 vote. "The Committee is continuing its policy of maintaining ample reserves in the banking system," the Fed said in a statement.

Last month, the Fed raised its benchmark interest rate by a quarter percentage point in its first hike since July 2023, while signaling the possibility of another increase later this year amid persistent inflation and high oil prices.

The Fed's decision left the gap between the key interest rates of South Korea and the U.S. at up to 1 percentage point.

The decision was in line with overall market expectations.

Global bond investment manager Pacific Investment Management Co. (PIMCO) projected last week that the Fed would hold rates steady in its October meeting before delivering another quarter-point increase in December.

"Economic activity is expanding at a strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little," the Fed said.

It added that the accumulation of more information and data will help the FOMC determine the policy stance appropriate to ensure inflation returns to its 2 percent goal in a timely manner.

odissy@yna.co.kr
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