The Federal Reserve held interest rates steady at 3.75% to 4% at 2 p.m. ET on Wednesday, Oct. 28, 2026, in Washington. The Fed held after a 10-2 vote in which Governor Lisa D. Cook and Cleveland Fed President Beth M. Hammack dissented in favor of another quarter-point hike, according to the Federal Open Market Committee statement.
The decision came six days before the Nov. 3 midterm elections. At his press conference, Fed Chair Kevin Warsh said "politics played no role" in the decision, Reuters reported. He also said the Fed would hold fewer rate-setting meetings starting in 2027, Reuters reported separately.
This article follows up on our preview of the October Fed decision. Attention now turns to the Dec. 8-9 meeting, where markets see a hike as likely.
Key Facts
- When: The statement was released at 2 p.m. ET on Oct. 28, 2026, and Warsh's press conference began at 2:30 p.m. ET.
- Where: The Marriner S. Eccles Federal Reserve Board Building in Washington, D.C.
- Decision: The federal funds target range stayed at 3.75% to 4%, after the Fed raised rates in September.
- Vote: The vote was 10-2. Cook and Hammack preferred a 25-basis-point increase.
- Schedule change: Warsh said at his press conference that the FOMC will still meet eight times a year, but one 2027 meeting will be devoted to strategy, with no rate vote expected. In 2028, two meetings will work this way. It is not in the policy statement.
- Status: Verified via the Fed statement and independent reports.
What Happened
The statement said "inflation remains elevated" and that "the accumulation of more information will help the Committee determine the policy stance," according to the Fed. In September, by contrast, the statement had said that "today's policy action will support" the Fed's goals, according to Yahoo Finance's live coverage.
The committee's description of the pace of economic activity changed from "solid" to "strong," the same coverage noted. It was the fourth meeting Warsh has led, Fox Business reported. Euronews reported that the statement has not mentioned the Middle East conflict or energy supply shocks by name since September, though it still lists geopolitical developments as a source of uncertainty.
According to Yahoo Finance, this was Cook's first dissent, and Hammack had also dissented in favor of a hike in July.
At the 2:30 p.m. ET briefing, Warsh called the internal debate "a heck of a family fight" and said "we came to the right policy decision for this moment," Reuters reported. On financial conditions since the September hike, he said: "I'm unwilling and unable to call them tight," according to American Banker's live coverage.
Asked about the midterms, Warsh was direct.
"Politics played no role in the decision. I just spent two days with my colleagues upstairs. I didn't hear an utterance about politics." — Fed Chair Kevin Warsh, Oct. 28, 2026, as reported by Yahoo Finance
Warsh declined to respond to criticism from President Donald Trump. "I'm not going to be responding to quotes from public officials," he said, per the same report. Asked whether he would take part in a White House review of Cook's status, he said "not to my knowledge."
Warsh also announced a change to the meeting calendar. He said eight meetings a year is "the right number," Reuters reported. In 2027, however, "one meeting will focus exclusively on broad monetary policy strategy," with no rate vote or policy statement expected, and he expects two such meetings in 2028. He did not say which meeting would be affected.
The change came at the press conference, not in the statement, and the Fed's meeting calendar still lists eight tentative 2027 meetings. Warsh also declined to give December guidance and called the 2% goal a hard target rather than an aspiration, HNGN reported.
Yahoo Finance posted the full press conference on its official YouTube channel.
https://www.youtube.com/watch?v=ZH19GtFWSIg
Market reaction
Stocks rose slightly. The Dow Jones Industrial Average closed up 97.50 points, or 0.19%, at 52,475.10, and the S&P 500 and Nasdaq each gained about 0.3%, according to Yahoo Finance's markets coverage. Longer-term Treasury yields rose. The 10-year yield ended at 5.05%, up from 4.99% on Tuesday, while the 2-year slipped to 4.67% from 4.70%, according to Treasury Department daily yield data.
The dollar index was little changed near 102 shortly before the decision, Yahoo Finance's live blog showed. December WTI crude settled at $102.78 a barrel, up 2.9%, and December Brent settled at $115.32, up 1.3%, Bloomberg reported via Rigzone. After the decision, CME FedWatch put the odds of a December hike at 87.5%, up from 73% on Tuesday, Euronews reported.
Timeline
| Date/Time (ET) | Event |
|---|---|
| Late Feb. 2026 | Iran war begins, and Brent rises from about $72 a barrel |
| May 22, 2026 | Warsh takes office as Fed chair |
| July 29, 2026 | Fed holds rates, and Hammack dissents in favor of a hike |
| Sept. 16, 2026 | Fed raises rates a quarter point in a unanimous vote |
| Earlier in October | September CPI shows 3.7% annual inflation |
| Oct. 26, 2026 | Brent falls more than 6% as Iran diplomacy advances |
| Oct. 27, 2026 | Two-day FOMC meeting begins |
| Oct. 28, 2 p.m. | Fed holds rates at 3.75% to 4% in a 10-2 vote |
| Oct. 28, 2:30 p.m. | Warsh holds press conference and announces schedule change |
| Oct. 28, 4 p.m. | Dow closes up 0.19% at 52,475.10 |
Who's Involved
- Kevin Warsh, Fed chair: He took office May 22, 2026, for a term that ends in 2030, according to his Fed biography. He says the Fed is committed to bringing inflation back to 2%.
- Lisa D. Cook, Fed governor: She dissented in favor of a hike. Trump is trying to remove her over mortgage-fraud allegations that she denies, Euronews reported.
- Beth M. Hammack, Cleveland Fed president: She dissented for a hike for the second time since July. Weeks earlier, she said she favored smaller, more frequent adjustments, Yahoo Finance reported.
- President Donald Trump: He has called Warsh's colleagues "hostile" and "partisan," and he said he had not spoken with Warsh about this decision, Reuters reported.
- Scott Bessent, Treasury secretary: He has voiced "great confidence" in Warsh, per the same Reuters report.
The Ground Picture
September consumer prices rose 3.7% from a year earlier, up from 3.4% in August, and wholesale prices rose more than 6%, Yahoo Finance reported. Gasoline has stayed above $4 a gallon for three months, and diesel hit a record $6.53 in late September, according to Euronews.
Energy has been one of the main sources of pressure. Shipping disruption around the Strait of Hormuz, including the sinking of a container ship in Iranian attacks, and the administration's Defense Production Act push on refining and diesel have both shaped the fuel-price backdrop.
Hiring has slowed. Employers added 29,000 jobs in September and unemployment rose to 4.2%, while the 30-year mortgage rate hit 7.4% in early October, Euronews reported.
Geopolitical Players
- Iran: Brent's drop of more than 6% on Monday came as diplomacy over the Iran war advanced. Oil is still well above where it was before the conflict, according to Euronews.
- European Central Bank: The ECB meets Thursday and is widely expected to keep its deposit rate at 2.5%, per the same report.
- Global bond markets: Vice Chair Philip Jefferson has pointed to the sharp rise in longer-term borrowing costs as a reason not to rush another hike, Euronews reported.
What It Means for the United States
This section is analysis.
Benefits and opportunities
- Warsh's statement that politics played no role may support the Fed's credibility as independent, at home and abroad.
- A strategy-only meeting could leave more room for long-range planning on balance-sheet policy and on how artificial intelligence affects productivity.
Risks and dangers
- A 10-year yield above 5% and mortgage rates near 7.4% weigh on housing and on families' budgets. Recent selling in chip and tech stocks shows that investors are sensitive to rates.
- A December hike, priced at more than 80%, could slow hiring further.
- The fight over removing Cook, with a White House proceeding reportedly set for Nov. 5, could raise doubts about the Fed's independence and unsettle markets.
- A lasting war-driven energy shock could entrench inflation expectations and force more tightening.
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What's Next
- Thursday, Oct. 29: September PCE inflation data are due. Core PCE is projected above 3%, Yahoo Finance reported.
- Nov. 3: The midterm elections decide control of the House and Senate.
- Nov. 5: A possible White House proceeding on removing Cook, Reuters reported.
- Dec. 8-9: The final FOMC meeting of 2026, with new economic projections, per the Fed calendar. Warsh said the data in coming weeks should leave the Fed "better positioned" to decide.
- 2027: Tentative meetings run from Jan. 26-27 to Dec. 7-8, with the strategy-only meeting not yet named.
Under the decision, which took effect Oct. 29, the Fed kept the rate it pays on reserve balances at 3.90% and the discount rate at 4%, according to its implementation note.
For live Fed coverage, watch Ecker Geopolitics and cast your vote in today's poll.
Sources
- Federal Reserve: Federal Reserve issues FOMC statement, October 28, 2026
- Federal Reserve: Implementation Note issued October 28, 2026, October 28, 2026
- Federal Reserve: Meeting calendars and information, October 28, 2026
- Federal Reserve: Kevin Warsh, Chairman, October 28, 2026
- Euronews: Fed holds rates days before US midterms as two officials push for another hike, October 28, 2026
- Yahoo Finance: Fed votes in split decision to hold interest rates steady despite sticky inflation, October 28, 2026
- Yahoo Finance: Rate decision live: Interest rates held steady in split vote, October 28, 2026
- Yahoo Finance via AOL: 'I didn't hear an utterance about politics': Warsh bats away midterm talk, October 28, 2026
- Reuters via Investing.com: Warsh says politics played no role in Fed's rate decision, October 28, 2026
- Reuters via Kitco: Warsh says politics played no role in Fed's rate decision by group he is 'honored' to lead, October 28, 2026
- Reuters via Yahoo Finance: Fed's Warsh announces changes in how future FOMC meetings will go, October 28, 2026
- Yahoo Finance: Stock market today: S&P 500 and Dow climb as Fed votes to hold rates steady, October 28, 2026
- U.S. Treasury: Daily Treasury Par Yield Curve Rates, October 2026, October 28, 2026
- American Banker: Federal Open Market Committee press conference October 2026: Live coverage, October 28, 2026
- HNGN: Fed Holds Rates in 10-2 Split, Leaves December Hike Open, October 28, 2026
- Fox Business: October FOMC: Federal Reserve holds rates steady ahead of election, October 28, 2026
- Rigzone (Bloomberg): Oil Rises with Iran Attack Report, Israeli Election in Focus, October 28, 2026
- Yahoo Finance (YouTube): Fed Chairman Warsh holds rates, says the Fed will vote on them less often, October 28, 2026