Fed holds rates steady as inflation stays elevated
The US Federal Reserve kept its benchmark interest rate in a 3.75 to 4.00 per cent range on 28 October 2026, according to the Federal Open Market Committee. The decision was a 10 to 2 vote. Two members, Governor Lisa Cook and Cleveland Fed President Beth Hammack, wanted another quarter-point increase. The Fed had raised rates in September for the first time since 2023. Consumer prices rose 3.7 per cent from a year earlier in September, while core inflation rose 2.6 per cent. The decision came six days before the US midterm elections, where inflation is a key issue.
Key facts
- Markets price about an 80 per cent chance of another rate hike at the 8-9 Dec meeting.
- The Fed says its inflation goal is 2 per cent; inflation is about one point above it.
- The US central bank has missed its inflation target for five and a half years.
- Pacific Investment Management Co. projected a quarter-point increase in December.
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Why it matters
Rate decisions affect borrowing costs and household budgets, and inflation remains a central political issue ahead of the midterm elections.
What changed
First published from CNBC, Euronews, The Hindu, CNA and Hindustan Times