October 2026: the Fed holds after its first rate increase in three years
A week before the midterms, the Fed left rates alone. Two officials wanted another increase, and markets expected one in December.
Kivorent News desk, published , 1 min read
This is a look back at an event from . We wrote it on November 11, 2026, from the sources listed at the end.
What to know
- The Federal Reserve held its key rate at about 3.9% on October 28, 2026, the AP reported.
- It had raised rates the month before, its first increase in three years.
- Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of a quarter-point increase.
Ten months after it was cutting interest rates, the Federal Reserve was debating how fast to raise them. On October 28, 2026, it chose to wait.
The decision
The Fed left its key rate unchanged at about 3.9%, according to the Associated Press. In September it had raised rates for the first time in three years.
Two officials voted against holding. Governor Lisa Cook and Beth Hammack, president of the Cleveland Fed, both wanted a quarter-point increase. The AP noted it was Cook's first dissent since she joined the board in 2022.
The reasoning
The Fed's statement said inflation remained elevated. Its case for pausing was that waiting would let officials gather more information while still bringing inflation back to the 2% target.
Kevin Warsh, in his first year as chair, said the Fed's policy was starting to work, with credit getting tighter for some businesses and households. He said there was no soft inflation target and that politics played no part in the decision, which came six days before the midterm elections.
What markets expected
Traders did not read the pause as the end. The AP reported that futures pricing put the odds of an increase at the December 8 and 9 meeting at nearly 85%.
How it fits together
This was the latest turn in a year that reversed direction:
- December 2025: the third cut in a row, with projections of one more cut to come.
- April 2026: an 8 to 4 vote to hold, with oil above $100 a barrel.
- September 2026: an increase.
- October 2026: a hold, with two votes for another increase.
Why it matters now
Higher rates raise the cost of borrowing for everyone, including the companies financing AI data centers with debt. Reuters cited financing strain at smaller data center firms as one of the pressures behind the November 5 selloff in AI stocks. The December meeting is the next date to watch.
This article is general information. It is not investment advice, and trading involves the risk of losing money.
Sources
- Federal Reserve keeps interest rates unchanged ahead of midterms despite elevated inflation, Associated Press, republished by Hawaii News Now, October 28, 2026
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