As had been widely expected, the Federal Reserve left interest rates unchanged this afternoon, as policymakers await more data on the direction of the economy and inflation before tightening further.

In a brief statement setting out the decision, officials acknowledged persistently-high uncertainty, but pointed to a “strong pace” of economic activity, “resilient” domestic spending, “robust” investment, and “strong” productivity growth. Job gains, they added, are keeping pace with the expansion in the workforce, and the unemployment rate has changed little. Most importantly, perhaps, they noted that “inflation remains elevated”, and said “The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal”.

The vote was carried by a 10 -2 margin, with only two officials – Lisa Cook and Beth Hammack – dissenting in favour of a second consecutive increase, surprising market observers who had braced for three or more. No new quarterly economic or interest rate projections were provided.

The decision follows September inflation measures that came in hot, with tariffs, soaring energy prices, and the artificial intelligence buildout combining to keep price pressures elevated. However, it also comes in the wake of a slowdown in job creation and a tumble in stock markets, and after several officials, including Philip Jefferson and John Williams, counselled a more patient approach to tightening, guiding markets to expect a hold in October.

The dollar is almost unchanged, Treasury yields are holding steady across the policy-sensitive end of the curve, and equity markets are moving sideways as tightening expectations for the year ahead remain intact.

We think the smaller-than-expected number of dissents and cautionary language inserted at the end of the statement should be read dovishly on the margins, but the cross-currency rate differentials that helped support the dollar’s gains earlier this autumn are likely to hold firm for now, leaving foreign exchange markets in neutral.

Currency market price action could intensify in the coming minutes as Chair Warsh delivers a statement and answers questions during the post-decision press conference. We will be watching closely for anything resembling forward guidance, as well as for updates on the five task forces he announced early in his term, and will update you on any material market-moving developments.