Fed Holds Interest Rates Steady at 3.75%-4%; Two Officials Back Hike

The Federal Reserve (Fed) kept interest rates unchanged on October 28, 2026, maintaining the federal funds rate target range at 3.75% to 4%. The Federal Open Market Committee (FOMC) voted 10-2 in favor of holding rates steady, with two members supporting an increase.

Why it matters: The Fed's benchmark interest rate influences borrowing costs for consumers and businesses. Following September's rate increase, the decision to hold rates steady provides no immediate relief from higher borrowing costs. Two officials favored another hike as inflation remained at 3.7% over the 12 months ending in September, according to the Bureau of Labor Statistics (BLS).

What the Fed Decided About Interest Rates

• The FOMC statement, released at 2:00 p.m. Eastern Time, maintained the federal funds rate target range at 3.75% to 4%.
• The committee voted 10-2. Lisa D. Cook and Beth M. Hammack dissented, favoring a quarter-percentage-point (0.25) rate increase at the meeting.
• The interest rate the Fed pays on bank reserve balances remains at 3.90%, effective October 29.
• The primary credit rate, which applies to borrowing through the Fed's discount window, remains at 4%.
• At its previous meeting on September 16, the Fed raised interest rates by a quarter-percentage point to the current range in a unanimous 12-0 vote. On July 29, it maintained the 3.5% to 3.75% range in a 9-3 vote, with Hammack, Neel Kashkari, and Lorie K. Logan favoring an increase.

What the Federal Reserve Said About the US Economy

• The Fed described economic activity as expanding "at a strong pace," compared with "at a solid pace" in its September statement.
• Domestic spending has remained resilient.
• Job growth has kept pace with labor force growth, while the unemployment rate has changed little. It stood at 4.2% in September, according to the BLS.
• The Fed stated that "inflation remains elevated." The Consumer Price Index (CPI) increased 3.7% over the 12 months ending in September.
• Economic uncertainty remains high, partly because of geopolitical developments.

When Is the Next Fed Interest Rate Decision?

The Federal Reserve's next meeting is scheduled for December 8-9, 2026, when officials will also release updated economic projections. The committee emphasized that additional economic data will help determine the appropriate monetary policy stance to bring inflation back to its 2% target in a timely manner. The Fed also reaffirmed its commitment to achieving price stability.

What You Can Do While Interest Rates Remain Elevated

• Check whether your credit cards or loans have variable interest rates.
• Prioritize paying off debts with the highest interest rates.
• Compare savings accounts and certificates of deposit (CDs) before leaving money in a low-interest account.
• If you plan to purchase a home or vehicle, compare financing offers from multiple lenders.
• Avoid accumulating additional credit card debt.

Sources: Federal Reserve, October 28, 2026 statement, implementation note, and Bureau of Labor Statistics. Accessed on October 28, 2026.