Even if inflation continues to rise, interest rates will remain at 3.75-4%.
Published October 28, 2026
The US Federal Reserve plans to keep interest rates unchanged in its final monetary policy decision before the midterm elections.
The central bank voted 10-2 to keep interest rates unchanged at 3.75-4%, as expected.
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CME FedWatch, which tracks the likelihood of monetary policy decisions, suggested there was a more than 90% chance that interest rates would be left unchanged.
“Economic activity is expanding at a strong pace,” the Fed said in a press release announcing Wednesday’s decision. “Uncertainty remains high, in part due to geopolitical developments, but domestic spending remains resilient. Productivity growth is strong and business investment is solid. Employment growth is in line with labor force growth, and the unemployment rate is little changed.”
The Fed noted how inflation continues to rise.
“The accumulation of further information will help the Committee determine the appropriate policy stance to return inflation to the Committee’s 2% target in a timely manner,” it added.
According to the latest Consumer Price Index (CPI) report, the annual inflation rate rose to 3.7% in September from 3.4% in August, with energy prices mainly accounting for the monthly increase.
There were signs earlier this month that the central bank would maintain its benchmark interest rate, with Fed Supervisory Chair Michelle Bowman advocating a “wait and see” approach.
“I don’t see any urgency to take further action at this point,” he said at a meeting of the International Monetary Fund and the World Bank in Bangkok, Thailand, this month. “We need to take some time and understand how things develop.”
The decision came ahead of Thursday’s release of the Personal Consumption Expenditures (PCE) price index report, which the central bank uses to assess inflation and inform decisions.
The Fed’s announcement today follows last month’s interest rate hike amid soaring inflation, the central bank’s first rate hike since July 2023. The move drew criticism from U.S. President Donald Trump, who has repeatedly pressed the Fed to cut interest rates since taking office. At the time, he wrote in Truth Social that “interest rates in the United States should be below 1%.”
The Fed’s next monetary policy meeting is scheduled for December 8-9, when it will make its final interest rate decisions of the year.
Current forecasts are for interest rates to rise by a quarter of a percentage point.
