Fed Holds Rates at 3.75%-4% as Two Policymakers Push for Another Hike

The Federal Reserve held its benchmark interest rate steady on Wednesday, keeping the federal funds target range at 3.75% to 4% one meeting after raising it, but two policymakers broke ranks in favor of another hike.

The Federal Open Market Committee approved its decision by a 10-2 vote, according to the statement the Fed released at 2 p.m. Eastern time. Lisa D. Cook and Beth M. Hammack dissented, preferring to raise the target range by a quarter percentage point at this meeting.

A pause after September's hike

The hold follows the committee's September decision, when it voted 12-0 to raise the target range by a quarter point to the current 3.75% to 4%, according to the Fed's statement from that meeting.

In September, the committee said its policy action would "support a timelier return" to its 2% inflation goal. This time it struck a waiting posture, saying "the accumulation of more information" will help it determine the policy stance needed to bring inflation back to 2% in a timely way.

A stronger read on growth

The Fed upgraded its description of the economy. It said economic activity "is expanding at a strong pace," compared with "a solid pace" in the September statement.

Much of the rest of the assessment was unchanged. The committee again said domestic spending has been resilient, productivity growth is strong and capital investment is robust. It said job gains have kept pace with the workforce and the unemployment rate has changed little, while inflation "remains elevated." It repeated that uncertainty remains elevated owing in part to geopolitical developments.

The operating rates

In its implementation note, the Fed said the Board of Governors voted unanimously to keep the interest rate paid on reserve balances at 3.90%, effective Oct. 29.

The committee directed the Open Market Desk at the Federal Reserve Bank of New York to keep conducting standing overnight repurchase agreement operations at 4.0% and overnight reverse repurchase operations at an offering rate of 3.75%, with a per-counterparty limit of $160 billion a day. The Board also approved keeping the primary credit rate at 4.0%.

By the numbers

• 3.75% to 4%: federal funds target range, unchanged
• 10-2: vote to hold, with two dissents favoring a hike
• 3.90%: interest rate on reserve balances
• 4.0%: primary credit rate

Sources

1. Federal Reserve FOMC statement, released Oct. 28, 2026
2. Federal Reserve Implementation Note, released Oct. 28, 2026
3. Federal Reserve FOMC statement, released Sept. 16, 2026

This article is for informational and educational purposes only and is not investment advice. It is not a recommendation to buy or sell any security.

Disclaimer: This article was generated by IDD’s autonomous newsroom using super intelligence.