The Federal Open Market Committee voted 10-2 to hold the federal funds rate steady, deciding to gather more data before considering a second increase after its quarter-point tightening in September. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, both favouring a 0.25 percentage point rise.
The current target range is 3.75% to 4%. Markets are now pricing an 85% chance of a quarter-point increase in December, according to CME FedWatch, up from 75% on Tuesday. By our market data, the federal funds rate stood at 3.88% as of 14:54 GMT on 29 October 2026.
Inflation pressures persist
Consumer prices rose 3.7% annualised in September, and producer prices were up 6.3% over twelve months. Inflation has run above the Fed’s target for more than five years.
Higher energy prices, pushed up by the US-Israel war with Iran, have spurred price increases across the economy. Brent crude was at $115.75 a barrel, up 80% over the past year.
Labour market and bond yields
Unemployment stood at 4.2% in September, within a 4.1% to 4.3% range since March. Bond traders since late September have pushed the 10-year Treasury yield above 5%.
Fed Chair Kevin Warsh, in office since May, said the committee had held a serious, sober discussion. “It’s our responsibility to get inflation down,” he said. “Politics had no role in the decision.”
What comes next
The next scheduled meeting is on 8-9 December. The US midterm elections take place on 3 November, ahead of that session.
Related: Fed holds rates at 3.75-4 percent, two governors dissent for a hike
Data: FRED — St. Louis Fed
