US interest rates held steady and economy grows - what it means for you

The US Federal Reserve has decided to keep interest rates unchanged at 3.75% to 4% following its latest meeting, held within a week of the midterm elections and right after its September rate hike. The central bank noted that despite ongoing economic uncertainty, the broader US economy continues to demonstrate strong resilience.

This month's decision to hold rates steady was not unanimous among committee members. While 10 members voted to keep the policy rate unchanged, Governor Lisa Cook and Cleveland Fed President Beth Hammack voted in favour of raising rates to a range of 4% to 4.25%.

Stock photo for illustration only, not from the actual event

Official figures published following the announcement revealed that the US economy expanded by 3.4% on an annualised basis during the three months leading up to September, outperforming analyst expectations. This robust expansion was primarily propelled by accelerated investment and strong consumer spending, with private investment surging by an impressive 19.4% largely due to artificial intelligence-related investments.

Meanwhile, inflation continues to hover above the Fed's target range. Consumer prices increased by 3.7% over the year to September, pushed upward by surging fuel and energy costs resulting from the war in Iran. The central bank utilizes interest rate adjustments to manage inflation toward its 2% annual goal while maintaining a stable job market.