Fed Interest Rate Decision: Prime Stays 7%, Vote Due 9 December
The Fed interest rate decision of 28 October 2026 left the United States benchmark rate unchanged, holding the target range at 3.75% to 4%. Two of the twelve voting officials dissented, both wanting a quarter-point rise. The hold keeps the US prime rate at 7.00% and sends the next vote to 9 December.
What the Fed Interest Rate Decision Said
The Federal Open Market Committee, the rate-setting panel of the United States central bank, voted 10-2 to leave the federal funds target range where it was. The federal funds rate is the overnight rate at which American banks lend reserves to each other, and it anchors most other short-term borrowing costs in the country.
In the statement released at 2:00 p.m. Eastern time, the Committee said that “economic activity is expanding at a strong pace” and that “inflation remains elevated.” On the labour market it said job gains had kept pace with the growth of the workforce and that “the unemployment rate has changed little.”
The wording shifted in two ways from the September meeting. Growth was upgraded from “solid” to “strong.” And the September line saying that the rate rise would support a return to the 2% inflation goal was replaced by a statement that the accumulation of more information will help the Committee judge what policy stance is appropriate. That is a hold with the door left open, not a promise to act.
Why Two Officials Voted for a Rate Rise
Governor Lisa D. Cook and Cleveland Federal Reserve President Beth M. Hammack voted against the decision, and both preferred to raise the target range by a quarter of a percentage point at this meeting. American Banker reported that it was Cook’s first dissent on a monetary policy action since she joined the Board of Governors in 2022; that detail comes from a single outlet.
A dissent is recorded in the statement but does not change the outcome. The decision carried on the 10 votes in favour.
The inflation data behind the dissent is published by the Bureau of Labor Statistics, the United States federal statistical agency. In the September consumer price index released on 14 October 2026, prices rose 3.7% over twelve months and 0.6% over the month on a seasonally adjusted basis. Core inflation, which strips out food and energy, ran at 2.6% over the year. The gasoline index rose 9.1% in the month alone and 34.2% over the year.
The labour market gave the opposite signal. The Employment Situation report published on 2 October 2026 put September payroll growth at 29,000 jobs and the unemployment rate at 4.2%.
The Rate Path Through 2026
| Meeting | Decision | Target range after | Vote |
|---|---|---|---|
| 15-16 September 2026 | Raised by 0.25 points | 3.75% to 4% | 12-0 |
| 27-28 October 2026 | No change | 3.75% to 4% | 10-2 |
| 8-9 December 2026 | Not yet decided | Not yet set | Not yet held |
The September increase was the first rise in the federal funds rate since 2023, which makes the two October dissents unusual: they pushed for more tightening, not less.
What the Hold Leaves Unchanged for Borrowers and Savers
The most direct consequence of a hold is that the prime rate does not move. As of 28 October 2026, the United States federal funds target range stands at 3.75% to 4%, unchanged since 16 September 2026, and the bank prime loan rate stands at 7.00% on the Federal Reserve’s H.15 series, its reading for 26 October 2026.
Prime is conventionally set three percentage points above the top of the federal funds target range, and it is the reference rate for many variable-rate products in the United States, including most credit cards and home equity lines of credit. With prime unchanged, the index those products are priced against is unchanged. The margin each lender adds on top of prime is set by that lender, so individual rates still vary and can change for other reasons.
Mortgages work differently. The Federal Reserve does not set mortgage rates; fixed mortgage pricing tracks longer-dated bond yields, which move on their own. In Freddie Mac’s weekly survey of United States lenders, the 30-year fixed average was 7.32% as of 22 October 2026, down from 7.40% the week before and up from 6.19% a year earlier. The 15-year average was 6.68%. Freddie Mac publishes the next reading on Thursday at 12 p.m. Eastern time, so that figure will be superseded within days.
These are national averages across surveyed lenders and loan types. They are not the rate any individual borrower is quoted, which depends on credit profile, deposit size, loan type, property and state.
How Likely Is a December Rate Rise?
The Committee has not committed to one. The statement contains no pledge to raise rates in December, and Chair Kevin Warsh declined to give a clear signal at his press conference.
Market pricing leaned heavily towards a rise, but the published readings did not agree. Bloomberg’s futures pricing on 28 October put the odds of a quarter-point rise at the December meeting at roughly 85%, and a CME FedWatch reading cited the same day gave 84%, with about 5% of pricing implying a half-point move. A separate reading attributed to Kiplinger put the probability nearer 75%. These are market prices, not forecasts by the Committee, and they move daily.
Warsh said inflation “remains elevated” and that “the committee will deliver price stability.” He described the policy as “starting to work some” while cautioning that there were “no firm conclusions,” and said of financial conditions that he was “unwilling and unable to call them tight.” Asked whether the United States midterm elections next week had influenced the vote, he said “politics played no role in the decision” and added, “I didn’t hear an utterance about politics.” On the internal debate, he told reporters the Committee had “just came out of a heck of a family fight,” a remark reported by American Banker.
The next meeting runs 8-9 December 2026 and is one of the four each year that carries a Summary of Economic Projections, the published chart of where individual officials expect rates to go. The decision would be announced on 9 December.
The Fed Will Vote on Rates at Fewer Meetings From 2027
Warsh used the press conference to confirm a change to how the Committee meets. The number of meetings stays at eight a year, but not all of them will produce a rate decision.
- 2027: One of the eight meetings will be devoted to monetary policy strategy, with no rate vote and no policy statement, beginning in the autumn.
- 2028: Two of the eight meetings will be strategy meetings, leaving six policy meetings.
- Still open: Warsh said the details are under consideration and that at those meetings “I do not anticipate making any policy decision, putting out a policy statement.”
The practical effect is fewer scheduled opportunities each year for the Committee to change rates. The 2027 calendar published by the Federal Reserve lists meetings on 26-27 January, 16-17 March, 27-28 April, 8-9 June, 27-28 July, 14-15 September, 26-27 October and 7-8 December, and the Federal Reserve notes that each 2027 date remains tentative until confirmed at the meeting before it. Which of those becomes the strategy meeting has not been announced.
Frequently Asked Questions
What Was the Fed Interest Rate Decision on 28 October 2026?
The Federal Open Market Committee left the United States federal funds target range at 3.75% to 4%. The vote was 10-2.
Who Dissented, and What Did They Want?
Governor Lisa D. Cook and Cleveland Federal Reserve President Beth M. Hammack dissented. Both preferred to raise the target range by a quarter of a percentage point at the October 2026 meeting.
When Is the Next Federal Reserve Rate Decision?
The next Federal Open Market Committee meeting runs 8-9 December 2026, with the decision announced on 9 December. It carries a Summary of Economic Projections.
Did the US Prime Rate Change After the October 2026 Decision?
No. The bank prime loan rate stood at 7.00% in the Federal Reserve’s H.15 reading for 26 October 2026, and a hold in the federal funds target range leaves that index unchanged. Individual lender margins on top of prime are set by each lender.
Does the Federal Reserve Set US Mortgage Rates?
No. Fixed mortgage rates in the United States track longer-dated bond yields rather than the federal funds rate. Freddie Mac’s weekly survey put the 30-year fixed average at 7.32% as of 22 October 2026 and publishes a new reading each Thursday.
