The Fed kept short-term rate rates unchanged in a 10-2 vote (last month’s decision to raise rates was unanimous). Ther…

The Fed kept short-term rate rates unchanged in a 10-2 vote (last month’s decision to raise rates was unanimous). There were two notable changes in the language: 1/ Economic activity was described as expanding at a “strong pace” rather than “a solid pace” prior; and 2/ A sentence was inserted that “the accumulation of more information will help determine a timely return of inflation to the Committee’s 2% goal” which was likely to justify no rate hike a week before the mid-term election with core YOY inflation of 3.1% well above the Fed’s 2% target.

Waiting a few months can give the Fed time to see where oil prices go as the situation in Iran winds up, and to evaluate the impact of the build out of AI memory centers and infrastructure.