US ECONOMY · FED
Published Wednesday, 28 October · Source: Federal Open Market Committee statement of 28 October 2026 (federalreserve.gov); RT economic calendar
Key Facts
- —The decision The Fed kept its federal funds target range at 3.75% to 4%.
- —The vote 10 to 2, with two members preferring a quarter-point rate hike.
- —The wording Inflation remains elevated, and economic activity is expanding at a strong pace.
- —The time Wednesday, 28 October 2026, at 2:00 p.m. Eastern (18:00 Lisbon).
The Federal Reserve left its key interest rate unchanged on Wednesday, but two of its decision-makers wanted to raise it. The Federal Open Market Committee, the group that sets US interest rates, kept the federal funds target range at 3.75% to 4% by a 10 to 2 vote.
The rate is the price banks charge each other for overnight loans, and it sets the baseline for borrowing costs across the dollar economy. Our economic calendar consensus expected the upper end of the range to stay at 4%.
Two Members Wanted A Hike
Lisa D. Cook and Beth M. Hammack voted against the decision. Both preferred to raise the target range by a quarter of a percentage point at this meeting.
Two votes for a hike show that part of the Committee sees prices as the bigger risk. The statement itself does not explain their reasoning.
What The Statement Says About The Economy
The Committee said economic activity is expanding at a strong pace and that spending by households and businesses at home has been resilient. It added that productivity growth is strong and capital investment is robust.
On jobs, it said gains have kept pace with the workforce and that the unemployment rate has changed little. On prices, it said inflation remains elevated.
Inflation And The 2 Percent Goal
The Committee said more information will help it decide the policy stance needed to bring inflation back to its 2 percent goal in a timely way. It also said it will deliver price stability.
It said uncertainty remains elevated, owing in part to geopolitical developments. It also said it is continuing its policy of maintaining ample reserves in the banking system.
What It Means For You
For US households and companies, a steady federal funds rate means the baseline for borrowing costs did not move this week. Loans and cards that follow short-term rates keep their current cost until the Committee acts again.
For investors abroad who hold dollar assets or dollar debt, the decision keeps the starting point for US rates where it was. Two dissents in favour of a hike are a reminder that the next move is not settled.
Background And Dissents
The Fed increased rates in September 2026 by 25 basis points, moving the target range to 3.75%–4.00%. That September increase was the first federal-funds-rate hike in about three years.
The Iran war had contributed to spikes in oil and gasoline prices, adding to inflation concerns. Hammack had also dissented in July in favor of an increase.
Political Context
The meeting concluded less than a week before the U.S. midterm elections on November 3, intensifying scrutiny of the decision. President Donald Trump has repeatedly called for lower rates, pressuring a central bank whose rate decisions are guided by economic conditions, not political demands.
Inflation and the cost of living have been central to the political races that will determine whether Trump's Republican Party remains in control of both houses of Congress.
Borrowing Costs And Energy Prices
For American households, the Fed's decision means borrowing costs on credit cards, auto loans, and mortgages are likely to remain elevated. The pause does not provide immediate relief, and markets are pricing a substantial probability of another hike in December.
The Fed's statement that inflation "remains elevated" signals that price pressures continue to weigh on consumers. Energy costs, including diesel fuel used in shipping and agriculture, remain high and are spreading to other goods and services.
What Is Not Known
The Committee next meets on 8 and 9 December, after the 3 November midterm elections. The statement does not say what it will decide there or how far rates could move.
We have no confirmed market reaction or remarks from the news conference scheduled for 2:30 p.m. Eastern. Both will be added once they are confirmed from the Federal Reserve.
Frequently Asked Questions
What did the Federal Reserve decide on 28 October 2026?
The Federal Open Market Committee kept the federal funds target range at 3.75% to 4% by a 10 to 2 vote. Lisa D. Cook and Beth M. Hammack voted against and preferred a quarter-point hike.
What is the federal funds rate?
It is the rate banks charge each other for overnight loans, and the Fed sets a target range for it. It influences borrowing costs across the US economy and the returns on dollar assets.
Did the Fed say what it will do next?
No. The statement says more information will help the Committee decide the policy stance that brings inflation back to 2 percent. It does not commit to a specific move.
Sources: Federal Open Market Committee statement of 28 October 2026 (federalreserve.gov); RT economic calendar.
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