Federal Reserve keeps interest rates at 3.75%–4% in a 10–2 vote
Oct 29, 2026
The Federal Open Market Committee (FOMC), the Federal Reserve's policy-setting body, decided on Wednesday, October 28, 2026 to keep the target range for the federal funds rate at 3.75% to 4%.
The decision
According to the Fed's statement:
- the target range for the federal funds rate stays at 3.75% to 4%
- the vote was 10 to 2
- Governor Lisa D. Cook and Cleveland Fed President Beth M. Hammack voted against the decision and preferred to raise the target range by 0.25 percentage points
The decision follows a 0.25 percentage point increase in September.
What the statement says about the economy
In its statement, the Committee said:
- economic activity is expanding at a strong pace, and domestic spending has been resilient
- job gains have kept pace with the workforce, and the unemployment rate has changed little
- inflation remains elevated
- uncertainty remains elevated, in part because of geopolitical developments
The Committee said the accumulation of more information will help it determine the policy stance appropriate for returning inflation to its 2% goal in a timely way. It said it will deliver price stability.
Other rates set by the Fed
In a separate implementation note, the Fed said:
- the interest rate paid on reserve balances stays at 3.90%
- the primary credit rate, which banks pay to borrow directly from the Fed, stays at 4%
- standing overnight repurchase agreement operations are offered at 4% and reverse repurchase operations at 3.75%
The press conference
At the press conference after the decision, Fed Chair Kevin Warsh said he does not believe in forward guidance, absent exigent circumstances or a crisis. Forward guidance is when a central bank signals the likely direction of future rate decisions.
What the federal funds rate is
The federal funds rate is the interest rate at which banks lend money to each other overnight. The Fed sets a target range for this rate and uses several tools to keep it within that range. Changes in the federal funds rate can affect other interest rates in the economy, such as rates on loans, mortgages and savings accounts.
What a dissent means
The FOMC has twelve voting members: the seven members of the Fed's Board of Governors, the president of the Federal Reserve Bank of New York and four of the other eleven regional Fed bank presidents, who vote on a rotating basis. A dissent means a voting member did not agree with the decision. The statement lists the members who dissented and what they preferred.
What the Fed's mandate is
The Federal Reserve has a dual mandate from the US Congress: maximum employment and stable prices. The Fed's inflation goal is 2% over the longer run, measured by the personal consumption expenditures (PCE) price index.
Why interest rate decisions are watched
Interest rate decisions can affect borrowing costs for households and companies, the value of the US dollar and the prices of bonds and shares. Investors often follow the Fed's statement and press conference for information about how the Committee sees the economy.
What to watch
The next scheduled FOMC meeting is on December 8–9, 2026. Before then, data on inflation, employment and economic growth will be published. The minutes of the October meeting are usually released about three weeks after the decision.
Risks and uncertainties
Economic data and central bank decisions can change quickly. Interest rate changes can affect markets in different ways, and past decisions do not indicate future ones.
What this means for investors
For Investing.one users following US markets, including S&P 500 ETFs such as CSPX.ETF and VUSA.ETF, the Fed's decision and statement may be relevant. The information above is based on the Federal Reserve's statement and implementation note.
Sources
- FOMC statement, October 28, 2026 (Federal Reserve)
- Implementation note, October 28, 2026 (Federal Reserve)
- Press conference coverage (Yahoo Finance)
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