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United States · Central banks · Inflation & data · Source: Federal Reserve
Fed holds rates at 3.75%–4% as two policymakers vote for a hike
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Summary: The US Federal Reserve left its benchmark interest rate unchanged on 28 October 2026, saying inflation is still too high and that it wants more information before deciding its next step. Two of the twelve voting members dissented in favour of a further rise.
What happened
The Federal Open Market Committee (FOMC) kept the target range for the federal funds rate at 3.75% to 4%. The decision passed by 10 votes to 2. Governor Lisa D. Cook and Cleveland Fed President Beth M. Hammack preferred an increase of 0.25 percentage point, according to the Fed's statement.
The statement described economic activity as "expanding at a strong pace" and said "Inflation remains elevated." It added that more information "will help the Committee determine the policy stance" needed to bring inflation back to the 2% goal.
In its implementation note, the Fed said it would keep the interest rate paid on reserve balances at 3.90% from 29 October. The primary credit rate stays at 4.0%, and the overnight reverse repo offering rate at 3.75%.
Background
The range has been unchanged since a quarter-point increase in September, CNBC reported. CNBC described the statement's wording on growth as "a seeming upgrade" from "solid" in September, and said this was Cook's first dissent since she joined the Fed's Board in 2022.
At his press conference, Chair Kevin Warsh said US growth in the first half of 2026 had been revised up to 2.4% from an earlier estimate of 1.8%. He said the third quarter appeared even stronger, with consumer spending "likely running above 3 percent growth". He also said inflation had been above the Fed's objective "for close to 6 years" and that energy-related prices had risen again in recent weeks.
Warsh announced a change to how meetings are used. The FOMC will keep eight meetings a year, but in 2027 one meeting will be devoted only to monetary policy strategy, with no rate vote or policy statement expected. He said he expects two strategy meetings and six policy meetings in 2028.
Why it matters for markets and crypto
The federal funds rate is a reference point for borrowing costs in the US and influences financial conditions worldwide. Policy decisions and expectations about future decisions affect how investors price many kinds of assets, including digital assets. This is general background only. This article draws no conclusion about any asset.
CNBC reported that before the decision markets had priced in less than a 10% chance of a hike, according to CME Group's FedWatch tool. It also reported that futures market pricing indicates a strong possibility of another increase in December, without naming the data source for that figure. Both are market pricing, not Fed guidance. CNBC noted that Warsh has avoided giving forward guidance on the Committee's intentions.
What to watch next
- Around 18 November 2026: minutes of this meeting. The Fed says minutes are released three weeks after the policy decision.
- 8–9 December 2026: next FOMC meeting, with a Summary of Economic Projections, according to the Fed's calendar.
Sources
- Board of Governors of the Federal Reserve System, "Federal Reserve issues FOMC statement", 28 October 2026
- Board of Governors of the Federal Reserve System, "Implementation Note issued October 28, 2026", 28 October 2026
- Federal Reserve, "Transcript of Chairman Warsh's Press Conference Opening Statement" (preliminary), 28 October 2026
- CNBC, "Fed holds rates steady despite concerns over inflation", 28 October 2026
- Board of Governors of the Federal Reserve System, FOMC meeting calendars (accessed 28 October 2026)
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