Fed Holds Key Interest Rate At 3.75%-4% And Signals Possible December Hike
The Federal Reserve held its benchmark federal funds rate at 3.75%-4% on Wednesday, Oct. 28, 2026, and signaled it may raise rates again at its December meeting.[1]
Two Fed policymakers, Governor Lisa Cook and Cleveland Fed president Beth Hammack, voted for a 0.25 percentage-point increase while the majority voted to hold.[1] Policymakers left the door open for further tightening to tame inflation and markets now widely expect a quarter-point hike in December.[1] Mortgage rates climbed to about 7.4% earlier in October before easing slightly, adding pressure to an already weak housing market.[1] Analysts also say booming investment in artificial intelligence is lifting prices for construction materials and electronic equipment.[1]
Average wages rose about 3% in the 12 months through September 2026, while consumer prices rose about 3.7%, eroding purchasing power for many households.[1] That gap has complicated the Fed's choice between cooling demand and protecting workers' incomes.[1]
The Fed described the move as a pause rather than a retreat and emphasized its commitment to bringing inflation down to target.[2]
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📌 Key Facts
- On Wednesday, October 28, 2026, the Federal Reserve held its benchmark federal funds rate at 3.75%–4% but signaled it is not retreating from efforts to curb inflation (Federal Reserve).
- After the pause, Fed policymakers are widely expected to raise rates again at their next meeting in December 2026 to further tamp down demand (December 2026).
- Fed Governor Lisa Cook and Cleveland Fed’s Beth Hammack voted for a 0.25 percentage-point increase at the October 28 meeting, while the majority of policymakers opted to hold (Lisa Cook).
- Mortgage rates climbed to a three-year high of about 7.4% earlier in October 2026 before easing slightly, a rise that is weighing on an already weak housing market (mortgage rates).
- Analysts say booming artificial-intelligence investment is proceeding largely undeterred by higher rates and is contributing to higher prices for construction materials and electronic equipment (artificial-intelligence investment).
- Average wages rose about 3% in the 12 months through September 2026, lagging the 3.7% annual consumer-price increase and eroding purchasing power for lower- and middle-income households (average wages).
📰 Source Timeline (2)
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- On Wednesday, October 28, 2026, the Federal Reserve held its benchmark federal funds rate at 3.75%-4% but signaled it is not retreating from efforts to curb inflation.
- NPR reports that, after this pause, Fed policymakers are widely expected to raise rates again at their next meeting in December 2026 to further tamp down demand.
- The article reiterates that Fed Governor Lisa Cook and Cleveland Fed’s Beth Hammack voted for a 0.25 percentage-point increase at the October 28 meeting, while the majority opted to hold.
- NPR highlights that mortgage rates climbed to a three-year high of about 7.4% earlier in October 2026 before easing slightly, weighing on an already weak housing market.
- The piece adds analyst commentary that booming artificial-intelligence investment is proceeding largely undeterred by higher rates and is contributing to higher prices for construction materials and electronic equipment.
- NPR cites data that average wages rose about 3% in the 12 months through September 2026, lagging the 3.7% annual consumer-price increase and eroding purchasing power for lower- and middle-income households.