Fed holds off on rate hike ahead of election

(Image credit: KAREN BLEIER/AFP/Getty Images)

The Federal Reserve left interest rates unchanged after the end of its meeting Wednesday, just as many economists had expected. "In the midst of an election, the last thing the Fed wants to do is add fuel to all the political controversy from the candidates," Sung Won Sohn, an economics professor at California State University, Channel Islands, told ABC News.

The Fed said in a statement that it would wait for "further evidence" of progress in the economy but that the case for a hike has "continued to strengthen."

The Fed's preferred gauge of price pressures has moved closer to the bank's 2 percent target this year, reaching 1.7 percent in the 12 months through September after stripping out volatile food and energy components. Unemployment was 5 percent in September, at or close to what many economists estimate is its lowest sustainable level.The central bank on Wednesday offered an assessment of the economy that was broadly similar to its September statement, reiterating that the "labor market has continued to strengthen and growth of economic activity has picked up" since the first half.Officials acknowledged a cooling of consumer spending, saying it "has been rising moderately," compared with September, when it had been "growing strongly." [Bloomberg]

Many believe the Fed will resume rate increases in December; earlier 2016 rate hikes were likely put off due to concerns about a poor employment report in May and the Brexit in June.

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Jeva Lange was the executive editor at TheWeek.com. She formerly served as The Week's deputy editor and culture critic. She is also a contributor to Screen Slate, and her writing has appeared in The New York Daily News, The Awl, Vice, and Gothamist, among other publications. Jeva lives in New York City. Follow her on Twitter.