US Fed skips rate hike, keeps interest rate unchanged between 5.25% - 5.5%

The US Federal Reserve skipped an interest rate hike Wednesday, as widely expected, and kept its federal funds rate unchanged between the 5.25% - 5.5% target range.

"Recent indicators suggest that economic activity expanded at a strong pace in the third quarter," it said in a statement.

"Job gains have moderated since earlier in the year but remain strong, and the unemployment rate has remained low," it added, replacing "Job gains have slowed in recent months" in a previous statement.

The Federal Open Market Committee (FOMC), however, noted that inflation remains elevated.

The decision to keep rates unchanged was unanimous as all 12 members of the Committee voted in favor of the move.

While it is the third interest rate skip by the Fed after it skipped a hike in June and another in September, the federal funds rate remains at its highest in 22 years.

The central bank raised rates by 525 basis points from March 2022 to July 2023 in 11 meetings to fight record inflation that climbed last summer to its highest in more than 40 years.

After soaring to 9.1% in June last year, annual consumer inflation dropped to 3% this June, but climbed to 3.7% in August.