Fed Decision Oct. 28, 2026 Seen as Hold
Fed Decision Oct. 28, 2026 had markets expecting a hold at 3.75%-4.00% and traders parsing the FOMC statement and Warsh remarks for December hike clues.
KEY TAKEAWAYS
- Fed expected to hold the federal-funds target range at 3.75%-4.00%.
- Markets priced roughly 90% odds of an October hold and 75%-86% odds of a December hike.
- Investors planned to scrutinize the FOMC statement and Chair Warsh's press conference for December signals.
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The Federal Reserve was widely expected to keep its federal-funds target range unchanged at 3.75%–4.00% on Oct. 28, 2026. Investors focused on the Federal Open Market Committee (FOMC) statement and Chair Kevin Warsh’s press conference for signals about a likely rate increase in December.
Fed Expected to Pause, Markets Eye December
The FOMC scheduled its decision for 2:00 p.m. ET, with Warsh’s press conference at 2:30 p.m. ET. Policymakers entered the meeting after raising rates by 25 basis points in September, the first increase in three years. Officials sought more time to assess whether inflation would ease and how the September hike would affect the economy.
Market-based measures showed a roughly 90% chance of no change in October, according to the CME FedWatch tool. Probabilities for a December increase ranged from about 75% to 86%, reflecting different contract snapshots. A survey of 100 economists found 94 expected no October move, while all anticipated a December hike.
Inflation remained hotter than expected, with energy prices and tariffs contributing to higher household costs. Officials tied future tightening to the persistence and breadth of inflation, incoming data, and the impact of the September increase. Investors planned to scrutinize the policy statement and Warsh’s remarks for clues on the Fed’s next steps.
The meeting occurred six days before the Nov. 3, 2026, midterm elections, a timing seen as a test of the Fed’s independence. Officials emphasized their mandate remained focused on economic conditions rather than political considerations.
A dissenting view came from Claudia Sahm, chief economist at New Century Advisors, who argued there was a strong economic case for raising rates in October rather than pausing.
