Fed Holds Rates at 3.75% to 4% in 10-2 Vote
Key Facts
The Federal Open Market Committee kept the target range for the federal funds rate at 3.75% to 4% in a decision issued on October 28, 2026, approved by a 10-2 vote. The Federal Reserve said the committee approved the statement by that vote, indicating that the rate hold did not have unanimous support among policymakers. Lisa Cook and Beth Hammack dissented, preferring to raise the target range by a quarter percentage point at the same meeting. The hold came as the statement described inflation as still elevated and said the committee needed more information to determine the appropriate policy stance. The committee linked its goal to returning inflation to 2%, the level it has set as its longer-run objective.
In its assessment of activity, the Federal Reserve said the economy was expanding at a solid pace and domestic spending had remained resilient despite elevated uncertainty, which the statement attributed in part to geopolitical developments. The statement described productivity growth as strong and capital investment as solid, pointing to continued economic activity alongside price pressures. It added that job gains had kept pace with labor-force growth, while the unemployment rate had changed little. The assessment gave no figures for the unemployment rate or job growth, but placed the labor market within an economic picture the central bank described as strong. The committee said that accumulating more information would help it determine the policy needed to ensure inflation returned to its goal in a timely manner.
The latest annual reading shown on the U.S. Bureau of Economic Analysis page for the personal consumption expenditures price index showed an increase of 3.4% in August 2026, the same rate recorded in July. The index measures changes in the prices of goods and services purchased by consumers in the United States, according to the bureau. In another measure of prices, the consumer price index rose 0.6% month over month in September, after an increase of 0.4% in August, and was up 3.7% in the twelve months through September. The Bureau of Labor Statistics said gasoline prices climbed 9.1% in September, accounting for more than half of the monthly increase in the overall index. These data provided context for the rate hold, while the Fed stressed that inflation remained elevated and that it would need more information to determine its stance.
The next personal consumption expenditures report was scheduled for October 29, 2026, according to the U.S. Bureau of Economic Analysis calendar. The index is released monthly as part of the personal income and outlays report, the bureau says, and reflects changes in prices for goods and services purchased in the United States. That put the next reading on the release calendar one day after the October 28 decision. The committee statement did not predetermine the decision it would make when the data arrived, saying instead that accumulating information would help it determine the appropriate policy stance. The committee is scheduled to meet again on December 8 and 9, 2026, with a press conference, according to the Federal Reserve calendar.
In bond markets, the yield on the 2-year U.S. Treasury initially moved higher after the rate hold was announced, according to the Associated Press. The agency said the yield topped 4.79%, compared with 4.70% late Tuesday, after the Fed disclosed that two members had preferred a rate increase. Reuters reported, in an article carried by Fidelity, that the 10-year Treasury yield rose 4.3 basis points to 5.036% on October 28. The 2-year yield also rose 4 basis points to 4.777%, according to the same report. The Associated Press reported that U.S. stocks were steady, while bonds recorded the initial upward move after the decision.
EL7 data showed Bitcoin closing at $81,343.5 on October 28, then at $79,944.7 on October 29. These figures represent daily closes and do not establish the cryptocurrency's price at any point during trading. The data place the two closing prices on the days around the Fed decision, without establishing on their own what caused the price change. The decision came as the central bank kept rates within the existing range, while two members preferred a quarter-point increase. The committee will revisit monetary policy at its next scheduled meeting on December 8 and 9, 2026, after the personal consumption expenditures report scheduled for October 29.