Federal Reserve Holds Rates at 3.75 to 4 Percent in a 10-2 Vote, and Texas Mortgage Rates Stay Above 7 Percent

The Federal Reserve left interest rates unchanged on Wednesday, Oct. 28, keeping the federal funds target range at 3.75 to 4 percent in a 10-2 vote, according to the Federal Open Market Committee's statement. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, preferring to raise the target range by a quarter percentage point. The hold follows a quarter-point increase in September — the first hike in more than three years — and comes less than a week before the November midterm elections.

“Inflation remains elevated,” the committee said in its statement, adding that “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.” Consumer prices were up 3.7 percent from a year earlier in September. At his press conference, Chair Kevin Warsh said the central bank “will deliver price stability, no ifs ands or buts,” while offering limited forward guidance; traders and economists widely expect another quarter-point increase at the Fed's December 9 meeting.

For Texas homebuyers, the pause changes little on the ground. Housing economists told Inman the hold will do little to lower mortgage rates, which have topped 7 percent since late September; the 30-year fixed-rate mortgage averaged 7.32 percent in the week of Oct. 22, according to Freddie Mac figures cited in the reporting. San Antonio buyers and sellers are therefore heading into the winter market with borrowing costs essentially where the September hike left them — and a December increase, if it comes, would push in the other direction.