Fed Holds Rates at 3.75% to 4% as Split Vote Reveals Disagreement Over Hike
Key Facts
On October 28, the Federal Reserve kept the target range for the federal funds rate at 3.75% to 4%, in a decision approved by the Federal Open Market Committee by 10 votes to 2. The decision left the range unchanged after the increase the Fed approved in September; it did not set a single rate at 4%, which is the upper end of the target range. The committee said in its statement that it had decided to "maintain the target range for the federal funds rate at 3.75% to 4%." The vote showed that disagreement over the direction of monetary policy persisted within the committee, with two members favoring an increase rather than holding rates steady. The decision came as the Fed described inflation as still elevated and maintained its longer-run goal of returning it to 2%.
Lisa Cook and Beth Hammack dissented from the decision to hold rates, favoring a quarter-percentage-point increase in the target range. Their positions reveal differing views among committee members on the appropriate level for rates, despite the majority's agreement to hold them at this meeting. The Fed statement said the two members preferred to "raise the target range for the federal funds rate by a quarter of a percentage point." At its previous meeting in September, the Fed had raised the range by a quarter point to 3.75%–4%, then held it at the same level in October. The new decision therefore included neither a rate cut nor another increase, while the vote showed that further tightening remained an option for at least two members.
The committee's economic assessment was based on activity expanding at a strong pace, supported by resilient domestic spending and strong capital investment. The Fed said that "economic activity has been expanding at a solid pace," but also noted that uncertainty remained elevated, partly because of geopolitical developments. It added that productivity growth was strong and capital investment was robust, indicators the Fed included in its assessment of economic conditions. At the same time, it said inflation remained elevated and that more information would help the committee determine the appropriate policy stance. The statement linked this to returning inflation to the committee's 2% goal over time, without announcing a change to the goal or the target interest-rate range.
EL7 data recorded Bitcoin's close at $81,343.50 on October 28, the day the decision was announced, and at $80,019.54 on October 29. The two closes show a decline between the days, but the data available here covers only Bitcoin prices and does not include Ethereum or XRP closes. In a separate reading at 17:50 Eastern Time on October 28, Investing.com said Bitcoin was up 0.6% at $81,336.1. The platform also said the cryptocurrency was on track for a 3.2% loss in October, the second consecutive month to post a loss. After the Fed's decision, the yield on two-year U.S. Treasuries briefly rose to more than 4.79%, compared with 4.70% late Tuesday; the Associated Press linked the move to the vote signaling that two officials favored a rate increase.
A day before the Fed's decision, Hilbert portfolio manager Jesse Mar said a sustained Bitcoin breakout above $87,500 could open the way toward a range of $95,000 to $98,000. Mar presented this as a possibility conditional on a breakout, not as a confirmed forecast that the price would reach $95,000 in the fourth quarter. The day after the meeting, EL7's recorded closes were $81,343.50 and then $80,019.54, below the cited breakout level. The Fed decision alone did not establish that the condition or price range would be met, and Mar's forecast preceded the meeting. U.S. third-quarter GDP data and the September reading of the Fed's preferred inflation measure were scheduled for October 29, according to Investing.com.
The next dates on the Fed's calendar include the release of the October meeting minutes on November 18, 2026, followed by the next Federal Open Market Committee meeting on December 8 and 9. The minutes will provide details of deliberations at the October 27 and 28 meeting, including the views surrounding the hold decision and split vote. The next meeting is the committee's next scheduled policy decision, after October's meeting kept the range at 3.75% to 4%.