The Federal Reserve on Wednesday held interest rates steady for the third time this year even as central bankers confront a surprisingly resilient economy and still too-high inflation.

The widely expected decision left interest rates unchanged at a range of 5.25% to 5.5%, the highest level in 22 years.

Policymakers have raised interest rates sharply over the past year, approving 11 rate increases in the hopes of crushing inflation and cooling the economy. In the span of just 16 months, interest rates surged from near zero to above 5%, the fastest pace of tightening since the 1980s.

Hiking interest rates tends to create higher rates on consumer and business loans, which then slows the economy by forcing employers to cut back on spending. Higher rates have helped push the average rate on 30-year mortgages above 8% for the first time in decades. Borrowing costs for everything from home equity lines of credit, auto loans and credit cards have also spiked.

Yet the rapid rise in rates has not stopped consumers from spending or businesses from hiring. 

Economic growth unexpectedly accelerated last week, with gross domestic product – the broadest measure of goods and services produced in the country – rising at a 4.9% annualized rate from July through September. It marked the best gain since 2021.

And against all odds, the labor market has remained very tight. Demand for workers continues to outstrip the number of jobs available, layoffs remain limited and the economy is still adding jobs at a solid clip. 

This is a developing story. Please check back for updates.