Feds Hold Rates Steady

GRAND RAPIDS, MI. - The Federal Open Market Committee (FOMC) of the Federal Reserve voted on Wednesday, October 28, 2026, to maintain the federal funds rate within the 3.75% to 4.00% range. This decision concluded a two-day meeting and followed a September 2026 rate hike, the first since 2023. Federal Reserve Chairman Kevin Warsh and his colleagues supported the hold.

The committee cited "strong pace" economic expansion, resilient domestic spending, robust capital investment, and strong productivity growth. However, inflation remains a concern. Annual consumer inflation reached 3.7% in September 2026, with producer prices up 6.3% year-over-year, exceeding the Fed's 2% target. Higher energy costs, including gasoline prices above $4 a gallon for three months, contributed significantly to the consumer price increase. These costs are partly linked to the U.S. war with Iran.

Markets anticipate further action, with Fed funds futures on October 26, 2026, pricing in a nearly 75% probability of at least one more rate increase by year-end. CME Group's FedWatch tool indicated an 88% probability of the October hold and a 71% chance of a December hike. No updated economic projections or "dot plot" forecasts were released at this meeting. The decision comes less than a week before the U.S. midterm elections.