The Fed chose to keep interest rates at 3.75%–4% at its October meeting. In my view, this decision is better understood as a wait-and-see move, rather than a sign that the Fed is starting to ease up on inflation.
The U.S. economy continues to show resilience, while inflation is still considered too high. In fact, the fact that two officials pushed for a 25-basis-point hike shows that inflation risks are not yet considered fully under control.
This means markets should be cautious about interpreting this decision as the start of an interest-rate-cutting cycle. Ahead of the next meeting, inflation data, the labor market, and economic conditions will remain the key factors.
The Fed is buying time to assess the data—not promising that interest rates will come down soon.