The Federal Reserve kept its benchmark interest rate unchanged on Oct. 28, 2026, pausing after a rate increase in September as inflation continued to run above the central bank’s goal. The decision leaves the federal funds target range at 3.75% to 4%.
The Fed’s rate-setting committee voted to stand pat, but the decision was not unanimous. Fed governor Lisa Cook and Beth Hammack, president of the Federal Reserve Bank of Cleveland, supported raising the rate by one-quarter of a percentage point. The majority chose to wait for more information before changing policy.
“Inflation remains elevated,” the Fed’s rate-setting committee said in its statement.
The central bank raised its benchmark rate for the first time in more than three years at its September meeting. Since then, consumer prices in September rose 3.7% from a year earlier, a larger annual increase than in August, according to the information reported about the meeting.
What the rate means for households
The federal funds rate influences the cost of short-term borrowing throughout the economy. That includes products such as credit cards, whose annual percentage rates, or APRs, often move with changes in short-term interest rates. The benchmark also affects other variable-rate loans, although individual lenders set the rates and terms offered to borrowers.
| Measure | Reported figure |
|---|---|
| Federal funds target range | 3.75% to 4% |
| September consumer-price increase | 3.7% year over year |
| Mortgage rate reported after the meeting | 7.4% |
Longer-term borrowing costs are set mainly by the bond market, though Federal Reserve decisions can influence them. Mortgage rates had climbed to a three-year high of 7.4%, adding pressure to home affordability. Higher financing costs can also affect consumers who are refinancing or taking out other loans.
Economists cited in the report said the inflation data are moving in the wrong direction. Dan North, a senior economist at Allianz Trade, said the inflation measure was rising rather than falling. The pause came less than a week before the Nov. 3 midterm elections, a timing that North said may have contributed to the Fed’s caution.
December decision in focus
After the October pause, investors widely expect the Fed to raise its benchmark rate at its next meeting in December. The stated purpose would be to slow demand and bring price increases back under control. That expectation is not a commitment by the committee, and the final decision will depend on the economic data and officials’ assessment at the time.
- The Fed held its target range at 3.75% to 4%.
- Two policymakers preferred a quarter-point increase.
- Credit-card and other short-term borrowing costs remain tied to an elevated benchmark, while mortgage rates reached 7.4%.
