The Fed held its target range at 3.75% to 4.00% on a 10–2 vote; two members wanted another quarter-point hike

Q1 What did the Fed decide?

The Federal Open Market Committee kept the target range for the federal funds rate at 3.75% to 4.00%. The vote was 10 to 2. Lisa D. Cook and Beth M. Hammack voted against, preferring a quarter-point increase at this meeting. The Committee also kept its policy of maintaining ample reserves in the banking system.

The statement describes economic activity as “expanding at a strong pace,” domestic spending as resilient, productivity growth as strong and capital investment as robust. It says job gains have kept pace with the workforce and the unemployment rate has changed little. On prices it says: “Inflation remains elevated,” and that “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.”

Q2 Where does this leave the rate after September?

The September 15–16 meeting raised the upper end of the range from 3.75% to 4.00%, the first increase since July 2023. Before that, the Fed cut six times between September 2024 and December 2025, taking the upper end from 5.50% to 3.75%. This meeting is the first hold after the September hike.

Q3 What did Chair Warsh say about the decision?

At the press conference, Chair Warsh said more information would help determine the right policy stance, and that the Committee had not concluded the current rate was sufficient. No further move was committed to in advance. Warsh said the goal remains 2% inflation as measured by PCE, not a softer or higher implicit target, and that with inflation above that goal for nearly six years, price stability is the immediate priority within the dual mandate.

The Chair said the September increase was showing encouraging signs in inflation compensation, inflation expectations and financial conditions, but that price stability had not yet been achieved. Warsh does not favor routine forward guidance or prejudging future meetings, though guidance can be useful in a crisis, and Warsh repeated not submitting an individual rate projection.

Q4 What did the Chair say about the economy?

Warsh described growth as strengthening and spreading beyond technology. The Chair cited first-half GDP growth revised from 1.8% to 2.4%, third-quarter activity that appeared stronger, consumer spending, business investment growing at roughly double-digit rates, and capital spending that is historically high relative to GDP. Warsh said strong growth does not by itself mean overheating, pointing to productivity gains that began before the latest AI investment surge, and said the preference is to bring inflation down without deliberately weakening employment.

On jobs, Warsh said unemployment is below its level a year earlier, payroll growth has picked up, and the four-week average of unemployment claims is exceptionally low. On markets, the Chair said financial conditions have tightened but are not tight, with investors more selective and some credit spreads wider, broadly as expected. Warsh said AI investment is not immune to interest rates. The Chair said geopolitical developments are lifting energy prices and near-term household inflation expectations reflect higher fuel costs, while longer-term expectations are generally seen as anchored, and noted that market interest rates had recently fallen despite higher oil prices.

Q5 What has the 10-year Treasury yield done?

Mortgage rates are priced off longer-term yields, so they track the 10-year Treasury more closely than the fed funds rate. The 10-year was 5.01% on September 16, the day the hike was announced. It rose to 5.31% on October 5, the highest close of 2026, and was 5.00% on October 26, the latest close published before this meeting. A year earlier, on October 28, 2025, it was 3.99%.

Q6 What is changing at the Fed itself?

Chair Warsh described a revised meeting schedule of eight meetings a year: seven policy meetings and one strategy-only meeting in 2027, and six policy meetings and two strategy meetings expected in 2028. Strategy meetings are not expected to include rate votes or policy statements, and Warsh said more detail on what will be disclosed from them will come before the new format starts next fall.

Five internal task forces are studying AI, productivity, jobs, inflation frameworks, data and the balance sheet. Their reports are targeted for year-end, though some may be late, with balance-sheet recommendations tentatively expected to reach the Committee early in the first quarter. Warsh said further balance-sheet changes are under study, not an announced plan. The Fed will hold a public hearing on November 16, expected to run three to four hours, on what AI means for productivity, employment, inflation and the dual mandate. Warsh said upcoming elections played no role in the decision.