Fed Keeps Interest Rates Steady as Inflation Remains High
By Emma Carter
Image information
This is a representative image for this Daily News lesson.
Intro
The Federal Reserve kept its benchmark interest rate unchanged on October 28, even as officials said inflation was still elevated. Other major news included the death of a federal judge connected to the prosecution of former Venezuelan president Nicolas Maduro and a cruise ship disruption in Cambodia.
Vocabulary
| Word | Part of speech | Meaning | Example |
|---|---|---|---|
| benchmark noun | noun | Meaning: a standard used for comparison or measurement | Example: The company uses last year's sales as a benchmark. |
| elevated adjective | adjective | Meaning: higher than normal | Example: Doctors found that the patient's temperature was elevated. |
| stubborn adjective | adjective | Meaning: difficult to change, stop, or deal with | Example: The team faced stubborn problems during the project. |
| overseeing verb | verb | Meaning: managing or watching an activity or process | Example: She is overseeing the building project this month. |
| stranded adjective | adjective | Meaning: unable to leave a place or continue a journey | Example: The storm left several travelers stranded at the airport. |
The story
The Federal Reserve kept its benchmark interest rate unchanged on October 28, even as officials acknowledged that inflation remains elevated. The decision leaves borrowing costs at their current level while the central bank continues to deal with price increases in the economy.
The Federal Reserve is the central bank of the United States. Its benchmark rate affects the cost of many loans, including some business loans and consumer credit. When inflation stays high, a central bank may raise rates to slow spending and reduce pressure on prices. However, higher rates can also make borrowing more expensive.
Investors widely expected the Federal Reserve to raise rates at its next meeting in December to fight stubborn inflation. The decision to wait means that officials are continuing to watch economic information before making another move.
The news roundup also reported that the federal judge overseeing the prosecution of former Venezuelan president Nicolas Maduro died at the age of 92. The report did not identify the judge by name.
In another development, hundreds of passengers aboard a cruise ship became stranded in Cambodia. Their trip was cut short because of high fuel prices. The report did not provide further details about how long the passengers would remain there or what arrangements would be made for their travel.
Together, the stories showed how economic decisions, legal developments and travel problems can affect people in different parts of the world.
Warm-up questions
- What can happen when interest rates become higher?
- What problems might travelers face during a cruise trip?
Comprehension questions
- Why did the Federal Reserve keep its benchmark rate unchanged?
- What can the Federal Reserve's benchmark rate affect?
- What did investors widely expect to happen in December?
- Why did the cruise passengers become stranded in Cambodia?
- What kinds of stories did the news roundup include?
Opinion questions
- Do you think keeping interest rates unchanged was a good decision? Why or why not?
- Which story in the roundup would concern you most: inflation, the legal case, or the stranded passengers?
Further discussion
- How can high borrowing costs affect families and businesses?
- What support should cruise passengers receive when a trip is cut short?
Writing prompt
- Write a short news summary explaining the three main developments in the article.
