Overview
- The Federal Open Market Committee left the federal funds target at 3.75%–4.00% on Oct. 28 in a 10-2 vote, with Governors Lisa Cook and Beth Hammack voting to raise instead.
- The post-meeting statement said inflation remains elevated and that the committee needs an accumulation of additional information to set policy, and the Fed released no new economic projections or dot plot.
- Sharp rises in energy costs tied to the Iran war and strong investment in artificial intelligence were flagged as key upward pressures on prices that complicate the Fed’s assessment.
- Markets reacted by treating the hold as a cautious pause and priced roughly a 75%–80% chance of a quarter-point hike at the Dec. 8–9 meeting, according to futures-based tools.
- The decision leaves consumers with higher borrowing costs for mortgages and loans already in place and sets the December meeting, the upcoming PCE inflation report, and Chair Kevin Warsh’s guidance as the next key milestones to watch.