Fed keeps its rate target at 3.75% to 4%; two voters prefer an increase

Key figure: Fed funds target range, 3.75% to 4%, unchanged. Source: Federal Reserve, Oct. 28 statement.

Key points

• The Fed keeps its target range at 3.75% to 4%.
• The vote is 10-2; two voters prefer a 1/4 point increase.
• The statement now calls activity “strong,” not “solid.”
• Consumer prices rose 3.7% in the year through September, BLS data show.

What happened

The Federal Open Market Committee voted 10-2 to maintain the target range for the federal funds rate at 3-3/4 to 4%, according to its statement released at 2:00 p.m. ET on Oct. 28, 2026. Two voters preferred a 1/4 percentage point increase. Interest on reserve balances stays at 3.90%, effective Oct. 29, per the implementation note (Exhibit 1). Why it matters: the decision follows September’s 1/4 point increase.

Exhibit 1. The committee left the range unchanged after a September increase

Federal funds target range, %, and vote, by effective date, Sept. 2025 to Oct. 2026

Effective	Change	Range	Vote
Sept. 18, 2025	▼ −25 bps	4.00 to 4.25	11-1
Oct. 30, 2025	▼ −25 bps	3.75 to 4.00	10-2
Dec. 11, 2025	▼ −25 bps	3.50 to 3.75	9-3
Sept. 17, 2026	▲ +25 bps	3.75 to 4.00	12-0
Oct. 29, 2026	No change	3.75 to 4.00	10-2

Source: Federal Reserve. Note: rates take effect the day after each decision; no change at the five 2026 meetings before September. Table: New Street.

What the statement changed

The statement says economic activity is “expanding at a strong pace,” where the Sept. 16 statement said “solid pace” (Exhibit 2). It drops the line that “today’s policy action will support a timelier return” to 2% inflation and says “the accumulation of more information will help the Committee determine the policy stance appropriate.” “Inflation remains elevated” is unchanged.

Exhibit 2. October’s statement calls activity “strong,” where September’s said “solid”

Key phrases, FOMC statements of Sept. 16 and Oct. 28, 2026

Topic	Sept. 16	Oct. 28
Decision	Raise 1/4 point	Maintain range
Vote	12-0	10-2
Activity	“expanding at a solid pace”	“expanding at a strong pace”
Jobs	“kept pace with the workforce”	“kept pace with the workforce”
Inflation	“remains elevated”	“remains elevated”

Source: Federal Reserve. Table: New Street.

Context and data

The Sept. 16 increase, by a 12-0 vote, was the first since July 2023, Fed records show. Consumer prices rose 3.7% in the year through September, not seasonally adjusted, or 2.6% excluding food and energy, BLS data show. The PCE price index rose 3.4% in the year through August, per BEA. Payrolls rose a seasonally adjusted 29,000 in September; unemployment was 4.2%.

What to watch

BEA publishes September PCE prices and third-quarter GDP at 8:30 a.m. ET on Oct. 29.