The Fed Holds Interest Rates Steady With Two Dissents For A Hike

As expected, the Fed held rates steady. But a dissent by Lisa Cook is sure to anger Trump.

Image WSJ.

Federal Reserve Issues FOMC Statement

Please consider the October 28, 2026 FOMC Statement.

The Committee decided to maintain the target range for the federal funds rate at 3-3/4 to 4 percent, in support of the Federal Reserve’s dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.

Economic activity is expanding at a strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.

Inflation remains elevated. 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 Committee will deliver price stability.

Voting against the monetary policy action were Lisa D. Cook and Beth M. Hammack, who preferred to raise the target range for the federal funds rate by 1/4 percentage point at this meeting.

The key phrase in the Fed statement is “Inflation remains elevated.” emphasis mine.

Trump is going to be more than a bit annoyed at Lisa Cook whom he seeks to fire and still does.

The Supreme Court denied his request as predicted in this corner. Trump has not commented yet on Cook, but I am sure it will be a hoot when he does.

Pause Now, December Hike

Within the past few weeks it was widely understood the Fed would pause this month. But at one point the odds surged well over 60 percent.

I did not believe that since it was too close to an election.

Despite the brief statements and lack of forward guidance, the Fed is indirectly giving forward guidance.

When the October rate hike odds surged, an endless parade of Fed speakers quickly knocked the idea wanting more data.

Forward guidance or not, the Fed will always find a way to do what it wants.

In that respect, hardly anything has changed with Warsh.

Here’s a link to the FOMC Press Conference. It rates to be interesting.

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