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US Federal Reserve holds interest rates steady

Published

The Federal Reserve kept its benchmark rate between 3.75% and 4% in a 10-2 vote on Wednesday, its last rate decision before the midterm elections. US inflation rose from 3.4% in August to 3.7% in September.

Two members of the Federal Open Market Committee, Lisa Cook and Beth Hammack, voted against the pause. They wanted a 25 basis-point increase. Fed Chairman Kevin Warsh said the midterms and politics "played no role in the decision".

Reports said a surge in fuel prices linked to the Iran war is a major driver of inflation. Todd Bitter of NEXA Lending said uncertainty around the Iran war and the midterms guided the decision. Morgan Stanley economists said the Fed might not be done tightening, and that future hikes will depend on incoming data.

CME Group's FedWatch tool showed 77.9% of traders pricing in a 25-basis-point hike in December. Warsh also announced the Fed will cut the number of meetings at which it votes on rates from eight to seven next year. It will cut the number by two in 2028.

Key facts

Who
Federal Reserve (US central bank); Federal Open Market Committee (Federal Reserve policy committee that held rates); Lisa Cook (FOMC member who dissented in favour of a 25 basis-point increase); Beth Hammack (FOMC member who dissented in favour of a 25 basis-point increase)
What
The Federal Reserve kept US borrowing costs on hold, with the Federal Open Market Committee holding rates in a 3.75 per cent to 4 per cent range. The article says this happened as a surge in fuel prices sparked by the Iran war reverberates across the US economy.
When
28 October 2026
Where
United States
Status
Reported

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