The Federal Reserve holds interest rates at 3.75% to 4%, as two officials dissent in favor of a raiseThe Federal Reserve holds interest rates at 3.75% to 4%, as two officials dissent in favor of a raise

The Federal Reserve kept its benchmark interest rate, the federal funds rate, in a range of 3.75% to 4% on Wednesday, October 28, 2026, six days before the November 3 midterm elections. The vote was 10 to 2. Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack voted against because they preferred to raise the rate by a quarter of a percentage point. It was Cook's first dissent since she joined the Fed's board in 2022. The Fed had raised rates by a quarter point in September, its first raise since 2023.

In its statement, the Fed said "Inflation remains elevated" and "Economic activity is expanding at a strong pace," and that "the accumulation of more information" will help it decide what to do next. Chair Kevin Warsh said the "overwhelming judgment" in the room was that "what we've done in this monetary medicine" is "starting to work some, but there's no firm conclusions." In recent speeches, Cook said inflation is too high and that she was prepared to raise rates if necessary, and Hammack said "a restrictive policy stance will be needed." CNBC reported that both were likely to explain their votes before the end of the week.

Asked about the elections, Warsh said: "Politics played no role in the decision." Treasury Secretary Scott Bessent said Fed officials "should have an open mind in terms of the transitory nature of the supply shock," which CNN read as a call to look past a rise in inflation driven mainly by energy costs. President Donald Trump has repeatedly called for lower rates.

Warsh also announced that from next fall, one of the Fed's eight meetings a year will be about long-term strategy, with no vote on rates, and two in 2028. The next rate decision is due December 9.