The Federal Reserve announced on October 28, 2026, that it would hold the target range for the federal funds rate, its benchmark policy rate, at 3.75% to 4.00% following the Federal Open Market Committee (FOMC) meeting held October 27–28. The Fed had raised rates by 0.25 percentage point in September, its first hike in three years and two months since July 2023, but this time it held off on a further increase.
The vote was 10–2, with Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissenting in favor of a 0.25-percentage-point hike. The September increase had been approved unanimously, 12–0.
In its statement, the Fed upgraded its description of economic growth from a “solid pace” in September to a “strong pace.” On inflation, it dropped a line from the September statement saying the policy action would support a quicker return to the 2% target. In its place, the statement now says that gathering more information will help the committee determine the policy stance needed to bring inflation back to 2% in a timely manner. A sentence affirming the committee’s commitment to achieving price stability was kept, as it had been in July and September.
Bitcoin (BTC) edged higher right after the announcement and traded around $81,000. Treasury yields also reportedly rose immediately following the decision, with the 10-year yield climbing to 5.025% and the 2-year to 4.78%.
At his press conference, Fed Chair Kevin Warsh noted that inflation had run above the committee’s target for nearly six years, saying, “It is our responsibility to bring inflation down.” While he acknowledged that overall financial conditions had tightened compared with earlier, he added, “I won’t, and can’t, call them restrictive.”
Warsh also explained that in 2027, one of the committee’s eight scheduled meetings will be devoted entirely to discussing its monetary policy strategy, with no rate vote and no policy statement. He stressed that politics played no role in the decision, which comes ahead of the midterm elections. The 2-year yield began to fall only after Warsh mentioned the changes to the meeting schedule.
In the Summary of Economic Projections (SEP) released in September, 16 of the 18 FOMC participants expected at least one more rate hike by the end of the year. Twelve projected a year-end target range of 4.00% to 4.25%, implying one more hike, while four projected 4.25% to 4.50%, implying two more. Only two expected rates to remain at current levels through the end of the year.
This was not the first time Hammack has dissented in favor of a hike. At the July meeting, she voted against the decision alongside Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan. In July, the Fed held rates at 3.50% to 3.75% in a 9–3 vote.
According to Fortune, this marks the first time since October 1992 that a Fed governor and a regional Fed president have both dissented in the same direction. Fortune also noted that this was Cook’s first dissent since she joined the Board of Governors in 2022.
According to OANDA Securities, the probability of a rate hike by the December meeting priced in by CME’s FedWatch tool rose from around 84% before the announcement to around 86%. The dollar slipped against the yen from around ¥158.23 before the announcement to around ¥157.85 during the press conference, then hovered near ¥158.00 after it ended.
The Bank of Japan will hold its monetary policy meeting on Thursday and Friday, October 29–30, 2026, and is scheduled to release the basic views of its Outlook for Economic Activity and Prices report on October 30. BOJ Governor Kazuo Ueda will hold a press conference at 3:30 p.m. JST that day. The full Outlook Report, including background analysis, will be published on Monday, November 2, 2026, at 2:00 p.m. JST.
The next FOMC meeting will be held on Tuesday and Wednesday, December 8–9, 2026, with the decision due on December 9 (early December 10 in Japan).
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