The Federal Reserve kept the federal funds rate unchanged at 3.75%–4.00% at its October 2026 meeting, following a 25 bps increase in September—the first rate hike since 2023. The decision was widely anticipated by markets, though two policymakers dissented in favor of an additional 25 bps hike.
The central bank noted that economic activity continues to expand at a strong pace. While uncertainty remains elevated, partly due to geopolitical developments, domestic spending has shown resilience. Productivity growth is solid, and capital investment remains robust. Job gains are broadly in line with labor force growth, and the unemployment rate has been little changed.
Inflation, however, remains elevated. Policymakers emphasized that as more data become available, it will help the Committee assess the appropriate policy stance to secure a timely return of inflation to its 2% target. The Committee reaffirmed its commitment to delivering price stability.
