Should this election need more intrigue, two important economic indicators are on this week’s calendar. The first came Wednesday afternoon: The Federal Reserve Open Market Committee (FOMC) has voted to not to raise interest rates at its November meeting. The committee’s two-day meeting concluded with Fed officials voting to keep the U.S. central bank’s target range for the federal funds rate at 0.25 to 0.5 percent. The second will come on Friday when the monthly jobs report is released.
In a statement regarding the decision to keep interest rates unchanged, the FOMC emphasized—as it has in recent meetings—the U.S. economy’s solid job growth paired with the lack of inflation. Therefore, “the Committee judges that the case for an increase in the federal funds rate has continued to strengthen but decided, for the time being, to wait for some further evidence of continued progress toward its objectives.”
The Fed’s decision on Wednesday to maintain the federal funds rate was widely expected by economists and analysts, as rate hikes before an election are historically rare.
“The Fed is usually reluctant to do anything before an election,” says Allan Meltzer, an economics professor at Carnegie Mellon University and an expert on the history of the Federal Reserve. “There was an exception in 1980, in advance of the Reagan-Carter election when the inflation rate was very high and Paul Volcker was the Chairman. But most [Fed] Chairman are not as bold as Volcker, and are reluctant to do things before an election.”