Fed Holds Rates at 3.75%-4%: What It Means for Your Money

The Federal Reserve left interest rates unchanged on Wednesday, Oct. 28, 2026, keeping the federal funds rate in a target range of 3.75% to 4%. The decision was widely expected, but the vote was not unanimous: Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of a quarter-point hike, the Fed's statement shows. The Fed rate decision was one of the top U.S. stories on Google News overnight. Here's what the Fed decided, why it matters and what it means for your mortgage, credit card and savings.

Not financial advice. This article explains the Federal Reserve's published decision and reporting on its likely effects. Talk to a qualified professional about your own situation.

What the Fed decided on Oct. 28

The Federal Open Market Committee (FOMC) voted 10-2 to hold its benchmark rate at 3.75% to 4%, where it has been since a quarter-point increase in September, CNBC reported. In its implementation note, the Fed also kept the interest rate it pays banks on reserve balances at 3.90%, effective Oct. 29.

The policy statement made three points worth knowing:

• The economy is "expanding at a strong pace." That is an upgrade from "solid" in September, Axios noted. The Fed also said job gains have kept pace with the workforce and the unemployment rate "has changed little."
• "Inflation remains elevated." The Fed's goal is 2%. Inflation has been above that target for more than five years, according to CNBC.
• The Fed is waiting for data. "The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee's 2 percent goal," the statement said.

In short, the Fed paused rather than raised rates, but it did not signal that it is done tightening.

Why Lisa Cook's dissent made headlines

Dissents by Washington-based Fed governors have historically been rare, though that norm has broken down since 2024, according to Axios. This was Cook's first dissent since joining the Fed's Board of Governors in 2022 as an appointee of President Joe Biden, CNBC reported.

Her vote drew extra attention because Cook is the governor President Donald Trump has been trying to remove over allegations about information on home loan applications. The Supreme Court stopped an earlier attempt, and the administration has restarted the effort with a White House hearing scheduled for early November, according to CNBC. Her lawyers say the allegations are a pretext, Axios reported. Asked whether he or the Fed would take part in that hearing, Chair Kevin Warsh said, "Not to my knowledge."

Hammack, a consistently hawkish voice, also dissented in July for the same reason. Dallas Fed President Lorie Logan and Minneapolis Fed President Neel Kashkari, who dissented alongside her in July, joined the majority this time, CNBC said.

Is a rate hike coming in December?

The next FOMC meeting is Dec. 8-9, 2026, according to the Fed's meeting calendar. It is a meeting that includes a new Summary of Economic Projections, often called the "dot plot."

Markets think a hike is possible. Futures pricing indicates a strong possibility of another hike in December, and perhaps one or two more in 2027, CNBC reported. Before Wednesday's decision, traders had priced in less than a 10% chance of an October hike, according to the CME Group's FedWatch tool.

Key data between now and then will shape the call:

• PCE inflation, the Fed's preferred gauge, for September is due Thursday, Oct. 29. CNBC said it is expected to be above 3% even excluding food and energy.
• Consumer prices. September's Consumer Price Index showed annual inflation rising to 3.7%, NerdWallet noted.
• Growth. The Atlanta Fed's GDPNow tracker points to 3.4% annualized growth in the third quarter, which would be the strongest in a year, according to CNBC.

Warsh has avoided giving forward guidance about the Fed's next steps. Politics are also in the background: the midterm elections are Nov. 3, and some observers have speculated that officials would be reluctant to raise rates so close to a vote, CNBC reported. For voting dates and deadlines, see our 2026 midterms early voting guide.

What the Fed decision means for your money

The federal funds rate is what banks charge each other for overnight loans, but it ripples into many consumer rates. Because the Fed held steady and more hikes may be coming, consumers are unlikely to see much relief from high borrowing costs soon, CNBC's personal finance team reported.

Credit cards

Most credit cards have variable rates tied to the prime rate, which is generally about 3 percentage points above the Fed's benchmark. Changes usually show up within one or two billing cycles. Average card rates have risen for three straight months and are at their highest since December 2025, LendingTree's Matt Schulz told CNBC, adding that rates are "highly likely to rise in the next few months, too, as card issuers implement the Fed's September hike."

What you can do: Paying down variable-rate balances, or asking your issuer for a lower rate, matters more than usual when rates are rising.

Mortgages

Fixed mortgage rates don't move in lockstep with the Fed. They generally track long-term Treasury yields and inflation expectations. Freddie Mac's 30-year fixed average was 7.32% for the week of Oct. 22, down from 7.40% a week earlier but well above 6.19% a year ago. The 15-year fixed averaged 6.68%, according to Freddie Mac. Freddie Mac publishes a new weekly average on Thursdays at noon ET.

NerdWallet's Zillow-based weekly average slid to 7.17% APR in the week ending Oct. 28, and NerdWallet warned that hotter inflation data could push rates higher in November. If you're weighing a refinance or PMI changes, our explainer on the White House mortgage executive order covers what changed.

Savings accounts and CDs

Savings yields tend to follow the Fed's rate, so a hold keeps them largely steady. Some top online high-yield savings accounts still pay more than 4%, according to Bankrate data cited by CNBC. That is far more than a typical savings account at a big bank.

Car loans, student loans and other debt

Variable-rate loans and home equity lines of credit generally move with the prime rate, so they won't change from this decision alone. Fixed-rate auto loans and existing federal student loans keep the rate you locked in. If you have defaulted federal loans, see how student loan debt collection is working this year.

Warsh changes the Fed's meeting schedule

The other news from Warsh's press conference: the Fed will reshape its calendar. "We believe eight meetings per year is the right number for the FOMC, but in 2027, one meeting will focus exclusively on broad monetary policy strategy, with neither a vote on the federal funds rate nor a policy statement anticipated," Warsh said, as quoted by CNBC. He said he expects two strategy meetings and six rate-setting meetings in 2028.

That means fewer chances each year for the Fed to change rates, which could make each decision a bigger market event.

What's next

1. Oct. 29: September PCE inflation data is released.
2. Early November: White House hearing on Lisa Cook's potential removal.
3. Nov. 3: Midterm elections.
4. Nov. 18: Minutes of the October meeting are due, three weeks after the decision, per the Fed's usual schedule.
5. Dec. 8-9: Next FOMC meeting and new economic projections.

The bottom line

The Fed hit pause in October, not stop. With inflation at about 3.7% and the economy growing strongly, two officials already want higher rates, and markets see a real chance of a December hike. For now, expect pricier credit card debt, mortgage rates above 7% and solid savings yields. For more money news, see the latest on Microsoft's voluntary buyouts.