The Federal Reserve kept its benchmark interest rate unchanged on October 28, 2026, holding the federal funds target range at 3.75 percent to 4 percent. The vote was 10 to 2, with two members preferring another quarter-point increase, according to the Federal Reserve’s policy statement.
What did the Fed decide on October 28?
The Federal Open Market Committee (FOMC) said it decided to maintain the target range for the federal funds rate at 3-3/4 to 4 percent. The statement was released at 2:00 p.m. Eastern time on October 28, 2026, at the end of a two-day meeting.
| Quick facts | Detail |
|---|---|
| Decision date | October 28, 2026 |
| Target range for the federal funds rate | 3.75% to 4.00% (unchanged) |
| Vote | 10 in favor, 2 against |
| Dissenting members | Lisa D. Cook and Beth M. Hammack |
| What the dissenters preferred | A 1/4 percentage point increase |
| Previous meeting (September 16) | Raised the range by 1/4 point to 3.75% to 4.00%, vote 12 to 0 |
| Next scheduled meeting | December 8-9, 2026 |
All figures come from Federal Reserve statements and calendars, as of October 31, 2026.
In other words, the Committee paused after its September move. The target range is the same one set on September 16, when the Committee raised it by a quarter of a percentage point on a unanimous 12-to-0 vote.
Why did two members dissent?
Lisa D. Cook and Beth M. Hammack voted against the action. According to the statement, they preferred to raise the target range by 1/4 percentage point rather than hold it steady. The statement does not set out their reasoning, so the public record in the policy statement shows only their preference.
A split vote matters because it hints at where the debate inside the Committee lies. A 10-to-2 hold with both dissents leaning toward higher rates is different from a hold with dissents favoring cuts. Here, the two members who disagreed wanted policy to be tighter, not looser. The September decision, by contrast, drew no dissents at all.
Dissents are a normal part of how the Committee works, not a sign of a breakdown. The FOMC has twelve voting members, and each is free to vote against the majority. What is worth watching is whether the number of dissenters grows or shrinks at the next meeting.
What does the Fed say about inflation and jobs?
The October statement repeats a phrase from September: “Inflation remains elevated.” It adds that gathering more information will help the Committee determine the policy stance needed to return inflation to its 2 percent goal in a timely way.
On the economy, the statement describes activity as expanding at a strong pace. It says domestic spending has been resilient, productivity growth is strong and capital investment is robust. It also says uncertainty remains elevated, partly because of geopolitical developments.
On work, the language is nearly the same as in September. Job gains have kept pace with the growing workforce, and the unemployment rate has changed little.
Readers following the data behind those phrases can compare them with the Herald’s reports on the September CPI and gasoline-driven inflation, the September jobs report and the third-quarter GDP advance estimate. Each covers one of the three pieces the Committee weighs: prices, jobs and growth.
What is the federal funds rate, and who sets it?
The federal funds rate is the interest rate banks charge one another for overnight loans of reserve balances. The Fed does not dictate a single number. Instead, the FOMC sets a target range, and the Fed then uses its tools to keep market rates inside that band.
According to the Federal Reserve, the FOMC has twelve members:
- the seven members of the Board of Governors;
- the president of the Federal Reserve Bank of New York; and
- four of the remaining eleven Reserve Bank presidents, who serve one-year terms on a rotating basis.
The Committee holds eight regularly scheduled meetings a year. Its long-run goals, as the Federal Reserve describes them, are price stability and sustainable economic growth. The October statement ties the decision to the Fed’s dual mandate of maximum employment and price stability.
How does a Fed decision reach household budgets?
The federal funds rate is a wholesale rate, but it influences many retail ones. Credit card rates, home equity lines and some other loans are often tied to short-term benchmarks, so they tend to move when the Fed moves. Savings accounts and certificates of deposit may also follow, though banks set their own rates and the pass-through is not automatic or immediate.
Longer-term rates, such as those on a 30-year fixed mortgage, are not set directly by the Fed. They also reflect investors’ expectations for inflation and future policy. A hold does not necessarily mean mortgage rates stay put.
What does a quarter-point change look like in dollars?
A worked example shows the scale. Suppose a borrower carries a $10,000 balance on a variable-rate loan whose rate moves one-for-one with the Fed’s target. A 0.25 percentage point increase raises the annual interest cost by $25 (10,000 x 0.0025 = $25), or about $2.08 a month. On a $300,000 variable-rate balance, the same change adds $750 a year (300,000 x 0.0025), or $62.50 a month.
The reverse holds for savers. A $20,000 deposit earning 0.25 percentage points more would gain $50 a year (20,000 x 0.0025). This is illustrative arithmetic only; actual rates depend on the lender, the product and the contract terms.
Why hold now instead of raising again?
The statement does not spell out a full rationale, but its language offers clues. The Committee said that gathering more information will help it set the stance needed to bring inflation back to 2 percent. A pause after a September increase fits that approach: officials can watch how earlier action works through the economy while keeping the option to move again.
The statement also describes an economy that is growing at a strong pace, with resilient spending and robust investment. That kind of backdrop gives a central bank room to wait for more data rather than act at every meeting. At the same time, inflation is described as elevated, which is why the dissenters’ preference for a further hike cannot be dismissed as an outlier view.
Because the statement offers no promise about the next move, any reading of December is speculation. The Fed has said only that its decisions will depend on incoming information.
What does a stronger-for-longer rate environment mean for Maryland?
The Fed’s decision is national, and the policy statement does not mention individual states. Even so, borrowing costs reach Maryland households and businesses like everyone else’s. Homebuyers in the Baltimore and Washington suburbs, small employers using lines of credit, and families carrying card balances all deal with the same national rate backdrop.
Business owners weighing financing can review what the state offers in the Herald’s guide to Maryland state business loan programs, which is a useful complement when private credit is costly.
What happens next?
The FOMC’s next scheduled meeting is December 8-9, 2026, the only 2026 meeting left after October. According to the Federal Reserve, minutes of regularly scheduled meetings are released three weeks after the policy decision, which points to a release in mid-November, around November 18 by simple counting. The minutes usually give a fuller account of the discussion than the short statement does, and they may shed light on the dissenters’ views.
Between now and then, new inflation and employment reports will arrive from the Bureau of Labor Statistics. The Committee has said that it is looking at incoming information, so those releases will shape the debate.
A pause with a split vote
The Fed’s October 28 decision was a hold at 3.75 percent to 4 percent, but not a unanimous one. Two members wanted a quarter-point increase, and the Committee still calls inflation elevated while describing growth as strong. For households, the practical message is that short-term borrowing costs stayed where September left them, as of the Federal Reserve statement of October 28, 2026.
This article is general information about published economic data, not financial advice.
Sources: Federal Reserve Board
