The US Federal Reserve (Fed), the central bank of the United States, kept its benchmark interest rate frozen at 3.50–3.75% local time yesterday (the 29th).

The Fed announced the decision to maintain the base rate following the conclusion of the regular Federal Open Market Committee (FOMC) meeting.

This marks the fifth consecutive time the benchmark interest rate has been frozen, following January, March, April, and June of this year.

This is the second consecutive rate freeze since Kevin Warsh took office as the new Fed Chair.

The Fed stated that the rate freeze was decided by a vote of 9 in favor and 3 opposed among the 12 FOMC members.

This differs from the June FOMC meeting, where the freeze was decided unanimously.

The Fed announced that three members—Beth Hammack, Neel Kashkari, and Lorie Logan—cast dissenting votes, advocating for a 0.25 percentage point (P) rate hike.

This is believed to reflect the situation where renewed escalation of the war between the US and Iran drove up international oil prices and inflation surged again within the US.

Aside from disclosing the vote count, the dissenting members, and their reasons, the Fed statement explaining the rationale for today's rate freeze was nearly identical to the statement released during last month's meeting.

The Fed stated, "Economic activity is expanding at a solid pace despite heightened uncertainty caused by conflicts in the Middle East and other factors."

It added, "Productivity growth and capital investment are strong. Job gains have kept pace with the labor workforce, and the unemployment rate has shown little change."

With the Fed's latest rate freeze, the interest rate gap between South Korea (2.75%) and the United States remains at 1.00 percentage point at the upper bound.

The Bank of Korea's Monetary Policy Board raised the base rate by 0.25 percentage points from 2.50% to 2.75% on the 16th.

(Photo: AP, Yonhap News)