Fed Holds Rates At 3.75%–4.00% And Waits For ‘More Information’

WASHINGTON — The Federal Reserve held interest rates steady on Wednesday, opting to delay any change to borrowing costs until after next week’s midterm elections and to await further data on the path of inflation, Reuters reported. The decision, at the central bank’s final meeting before the November 3 vote, was widely expected — and it was not unanimous.

The Decision

In a 10–2 decision, the Federal Open Market Committee maintained its benchmark interest rate in the current 3.75 per cent to 4.00 per cent range, the level set in September, when officials approved a quarter-point increase for the first time in three years. The statement acknowledged that inflation “remains elevated,” upgraded the committee’s assessment of the economy, and hinted that further rate hikes may be coming depending on how inflation performs. “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 statement said. “The Committee will deliver price stability.” The assessment of growth was upgraded to “strong” from the “ solid” expansion recorded at the September meeting; investment was still described as robust, and job gains were viewed as keeping pace with the workforce.

Two Dissents, Both For A Hike

Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, each preferring a quarter-percentage-point rate increase this month. It was Cook’s first dissent on a policy decision, Reuters reported, and it came while she is targeted by President Donald Trump for removal from the central bank. Hammack is a consistently hawkish voice and also dissented in July in favour of the same increase. Chairman Kevin Warsh was due to explain the decision at a news conference on Wednesday afternoon. Reuters noted that the statement marks a notable change from the September 15–16 meeting, carrying a hint of the forward guidance Warsh has said he wants to avoid.

Why They Paused

The case for waiting rests on a genuinely split picture. Inflation is running well above the Fed’s 2 per cent target: consumer prices rose 3.7 per cent in the year to September, wholesale prices climbed more than 6 per cent, and the core personal consumption expenditures index — the Fed’s preferred gauge — is projected to exceed 3 per cent, though core consumer inflation, at 2.6 per cent, has risen more slowly. Against that, a pause gives officials time to assess the effect of September’s hike, which for many borrowers has not yet fully arrived: it can take one or two billing cycles before a rise in the federal funds rate shows up in credit card rates. The other unknown is political. The November 3 election results may affect the timeline of the war in Iran, a major driver of this year’s inflation through energy prices — a war Reuters reported on Wednesday has now cost the United States more than $47 billion, over 25 per cent above the Pentagon’s July estimate.

What Comes Next

Markets took the decision calmly: stock indexes rose modestly after Warsh began speaking, with the Nasdaq composite and the S&P 500 each up 0.2 per cent in early reaction reported by Reuters, while the two-year Treasury yield eased a basis point to 4.726 per cent and the ten-year yield stood at 5.007 per cent. Forecasters expect a quarter-point increase in December, at the Fed’s final meeting of the year, and market pricing reported earlier this week put the probability of at least one more hike by year-end at nearly 75 per cent. For borrowers, Wednesday’s patience does not undo September’s increase — it only means the Fed is not, for now, guiding borrowing costs higher still.

Sources: Reuters; USA Today; the Federal Open Market Committee statement — reporting of October 28, 2026.