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United States

Fed holds rates at 3.75% to 4% with two officials favouring a hike

The split decision and officials' comments on further tightening signal possible rate increases that would affect borrowing costs for businesses and households.

Photo: Yahoo Finance

What happened

The Federal Reserve left its benchmark federal funds rate unchanged at 3.75% to 4.00% at its October 2026 meeting. tradingeconomics.com+1 The vote was 10 to 2, with two policymakers favouring a further 25 basis point rate increase. tradingeconomics.com+1 The hold followed a 25 basis point increase in September, the first rate rise since 2023. tradingeconomics.com+1 Fed Chair Kevin Warsh announced that the central bank will reduce the number of policy meetings at which members vote on rates starting in 2027. tradingeconomics.com

Around it

Cleveland Fed President Beth Hammack said on Thursday that policy will need to move to a restrictive stance to bring inflation back to 2% in a timely manner, and she prefers smaller, more frequent adjustments. Yahoo Finance Dallas Fed President Lorie Logan said the committee needs to implement at least two more 25 basis point rate increases. Ground News+1 Richmond Fed President Thomas Barkin said the central bank must raise rates further, calling inflation the most important risk right now. Ground News The personal consumption expenditures price index rose 0.5% in September, and excluding food and energy it rose 3.1% year over year, still well above the 2% target. Bloomberg

What comes next

The central bank said it will assess additional economic data before determining its next move. worldviewadvisory.com Markets see odds above 80% for a December rate increase. Ground News

Sources

  1. tradingeconomics.comUnited States Interest Rate News 485858 15
  2. Yahoo FinanceFed's Hammack favors gradual rate-hike path to lower inflation
  3. Ground NewsRichmond Fed's Barkin Says He Expects More Rate Hikes But Unsure About How Many or When
  4. worldviewadvisory.comFed holds rates steady at 3.75% to 4% with a split vote
  5. BloombergThe Fed Needs a Better Way to Talk About Interest Rates

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