US Federal Reserve holds rates steady as 3 policymakers back hike

The US Federal Reserve kept its benchmark interest rate unchanged Wednesday as three policymakers voted in favor of a quarter-point increase.

The Federal Open Market Committee maintained the federal funds rate target range between 3.5% and 3.75% in a 9-3 vote.

Beth Hammack, Neel Kashkari and Lorie Logan opposed keeping the rate unchanged, preferring to raise the target range 25 basis points at the meeting.

The Fed said economic activity continued to expand at a solid pace despite heightened uncertainty partly stemming from the war in the Middle East.

Productivity growth and capital investment remained strong, while job gains kept pace with labor force growth and the unemployment rate changed little, it added.

The central bank said inflation remained above its 2% target, partly due to supply shocks that pushed up prices in some sectors, including energy.

The Fed also said it would continue its policy of maintaining ample reserves in the banking system.