Fed holds rates at 3.75%-4% as two policymakers dissent in favour of a hike

The Federal Reserve left US interest rates unchanged on 28 October 2026, six weeks after raising them, but two of the 12 voters wanted to go further. The Federal Open Market Committee kept the federal funds rate's target range at 3-3/4 to 4 percent by a 10-2 vote, according to its statement, released at 2:00 p.m. EDT (19:00 CET). Fed Governor Lisa D. Cook and Cleveland Fed President Beth M. Hammack voted against, preferring an immediate rise of 1/4 percentage point.

The October statement says activity is expanding at a "strong pace", where the September statement said a "solid pace", and repeats that inflation "remains elevated". Both describe productivity growth as strong, job gains as keeping pace with the workforce and unemployment as little changed. In September, the committee said its rate rise would help bring inflation back to its 2 percent goal sooner. The October statement drops that line and says that gathering more information will help it judge what policy stance will return inflation to 2 percent in a timely way. It does not say whether further moves are likely and gives no reason for the two dissents.

Hammack also dissented at the July meeting, when the committee held the range at 3.5% to 3.75% by 9 votes to 3; Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie K. Logan joined her then in preferring a quarter-point rise.

In the implementation note, the Board of Governors voted unanimously to keep interest on reserve balances at 3.90 percent from 29 October and to set the primary credit rate at its existing 4.0 percent. The committee directed the New York Fed's Open Market Desk to run standing overnight repo operations at 4.0 percent and reverse repo operations at 3.75 percent, with a limit of $160bn per counterparty per day. It also told the desk to keep rolling over maturing Treasury principal at auction and to put principal from agency securities into Treasury bills. No economic projections were published at this meeting.