According to Zhitong Finance APP, the Federal Reserve kept interest rates in the 3.75% to 4% range as the market expected. Charles Schwab Hong Kong Senior Vice President and Wealth Advisor Lin Changjie said that after raising rates by 25 basis points in September, the pause shows the central bank is weighing persistent inflation pressure against signs that some parts of the economy are beginning to cool.
This decision looks more like a brief breather than a change of direction; the question the market is watching is gradually shifting from whether the Fed will raise rates again to how much more tightening will ultimately still be needed. He pointed out that the Iran conflict has pushed up energy costs, continuing to intensify cost-of-living concerns for many Americans, while the labor market has also weakened somewhat.
On the other hand, the U.S. economy still has enough resilience to give the Fed room to maintain a tight monetary policy without being forced into consecutive rate hikes. This trade-off is especially evident just days before the U.S. midterm elections, because the cost of living is the top concern for many voters.
He said expectations in the market for a December rate hike are growing louder, so any sign that rates still need to rise will reinforce the view that October was merely a pause in the tightening cycle, not the end of the cycle. For investors, the current situation is that the path of inflation matters no less than the rate decision itself. If energy pressure remains high and economic activity continues to hold steady, it means high interest rates may remain part of the investment environment and persist well into 2027.
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