Fed Leaves Rates On Hold

2026-10-28 18:00 By Joana Taborda 1 min. read

The Federal Reserve left the federal funds rate unchanged at 3.75%–4.00% at its October 2026 meeting, following a 25bps hike in September, which was the first rate increase since 2023.

The decision came in line with market expectations but two policymakers voted for a 25bps rate hike.

The central bank said that economic activity is expanding at a strong pace.

While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient.

Job gains have kept pace with the workforce, and the unemployment rate has changed little.

Inflation remains elevated.

Policymakers also added that the accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the 2% goal ad that the Committee will deliver price stability.

In addition, Chair Warsh announced that the central bank will reduce the number of policy meetings at which members vote on interest rates starting in 2027.



News Stream
Fed Leaves Rates On Hold
The Federal Reserve left the federal funds rate unchanged at 3.75%–4.00% at its October 2026 meeting, following a 25bps hike in September, which was the first rate increase since 2023. The decision came in line with market expectations but two policymakers voted for a 25bps rate hike. The central bank said that economic activity is expanding at a strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated. Policymakers also added that the accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the 2% goal ad that the Committee will deliver price stability. In addition, Chair Warsh announced that the central bank will reduce the number of policy meetings at which members vote on interest rates starting in 2027.
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Fed to Keep Rates Steady
The Federal Reserve is widely expected to keep the federal funds rate unchanged at 3.75%–4.00% at its October 2026 meeting, following a 25bps hike in September, the first rate increase since 2023. However, investors will be closely watching policymakers’ comments for clues about the future policy path, particularly from Chair Kevin Warsh, as markets currently price in another 25bps hike in December. Recent inflation data have reinforced concerns about persistent price pressures. The US annual inflation rate accelerated to 3.7% in September, up from 3.4% in each of the previous two months and above market expectations of 3.6%, largely driven by higher energy prices. Meanwhile, producer prices surged 6.3% year over year, marking the fastest increase since December 2022 and significantly exceeding expectations of 5.3%. Elevated oil prices are likely to sustain upward pressure on inflation. Meanwhile, the labor market has settled into a “low-fire, low-hire” pattern.
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Warsh Comments Boost Bets on Fed Rate Hold in October
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