Fed interest rate decision October 2026: Fed holds rates steady

The Federal Reserve voted Wednesday to keep benchmark interest rates on hold, opting to take a patient approach in its fight against inflation despite mounting evidence that price pressures are proving more nettlesome than policymakers had hoped.

In a widely expected decision, the Federal Open Market Committee kept the overnight funds rate in a range between 3.75%-4%, where it has been since the central bank approved a quarter percentage point increase in September.

“Inflation remains elevated,” the post-meeting statement said. “The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal. The Committee will deliver price stability.”

Cook has been at the center of a continuing controversy in which President Donald Trump has tried to remove her from office over allegations concerning information she provided on home loan applications. While the Supreme Court stopped the president’s attempts, the administration has restarted the move, with a hearing scheduled for early November.

This was Cook’s first dissent since joining the Fed in 2022 as an appointee of President Joe Biden.

Dallas President Lorie Logan and Minneapolis President Neel Kashkari both joined Hammack in voting no the last time the committee held, in July, and both have expressed the need for higher rates. However, they fell in with the majority Wednesday.

The midterm elections have lingered over the decision. Pivotal votes take place nationwide on Nov. 3, with control of Congress at stake. Fed officials consider political independence to be a cornerstone of the central bank, but some observers have speculated that officials won’t want to raise rates this close to an election.

Trump, who nominated Fed Chairman Kevin Warsh to the position, has been at odds with the Fed for years. Trump has charged that the funds rate should be much lower.

The dissents reflected underlying conflict on the committee over how aggressively it needs to raise rates to combat rising prices. Inflation has been above the Fed’s 2% target for more than five years, and the pace of price increases has only picked up since the September meeting.

Statements over the past several weeks, though, have reflected a desire to wait for additional data to come in before tightening policy further. Fed Vice Chair Philip Jefferson and New York Fed President John Williams both said current economic conditions allow policymakers time to evaluate their next move.

The statement characterized economic activity as “expanding at a strong pace,” a seeming upgrade from “solid” in September. There were no other substantial changes to the statement other than the removal of a sentence…