Fed Expected to Hold Rates at 3.75%–4% in October, With Further Hikes Still on the Table
Key Facts
The U.S. Federal Reserve is expected to keep its target interest rate range at 3.75%–4% at its October 2026 meeting, according to Reuters, as officials continue to discuss possible additional increases before year-end. The agency reported that officials believe further hikes will likely be needed, with debate focused on their pace and size. An earlier Reuters report, published in early October, said traders had pared bets on a December rate increase. Even so, a December hike remained priced in at a probability of around 90% at the time, according to the same report. In the bond market, the U.S. 10-year Treasury yield fell sharply in the 22 October session, according to Investing.com. The yield dropped 19.8 basis points to close at 4.951%, its lowest close since 17 September.
The Fed raised rates by a quarter of a percentage point at its September meeting, according to its policy statement, with expectations for an October hold following that increase. Minutes of the September meeting showed that most participants believed an additional increase in the target range would likely be appropriate before year-end. Their assessment covered the remainder of the current year, keeping another increase on the table after the September decision. Fed Chair Kevin Warsh, in remarks reported by the Associated Press, said he does not prejudge meeting decisions or announce in advance what he might do at the remaining meetings of the year. He added: "I do not prejudge meetings. And I do not believe in saying now what I might do."
In the labor market, the seasonally adjusted number of people continuing to receive unemployment benefits rose to 1,728,000 in the week ended 10 October 2026, according to the U.S. Labor Department. That was an increase of 25,000 from the previous week, according to the official release. In housing, the U.S. Census Bureau said privately owned housing starts reached a seasonally adjusted annual rate of 1,221,000 units in September 2026. Building permits were at a seasonally adjusted annual rate of 1,400,000 units in the same month, according to the bureau. The permits reading thus exceeded the starts reading in September, with both indicators reported at seasonally adjusted annual rates.
The Federal Reserve holds its next meeting on 27–28 October, according to its official meeting calendar, amid Reuters expectations that it will maintain the current interest rate range. The meeting comes as the pace and size of additional increases remain under discussion among officials, according to the agency. Following the October decision, the central bank will publish the minutes of that meeting on 18 November, according to the official calendar. The Federal Open Market Committee will then hold its next meeting on 8–9 December. The December meeting falls within the period during which most participants at the September meeting believed an additional rate increase would likely be appropriate, before year-end.