LOS ANGELES, California, October 29, 2026 — The Federal Reserve maintained its federal funds rate at 3.75-4.00% following a two-day policy meeting that concluded on October 28. Although most market participants were expecting a pause in rates, it is clear that a possible rate hike in December is still very much in play. Monetary policy announcements published by the Federal Reserve outline federal funds rate targets.
Why the Fed Chose to Hold
Inflation remains high relative to the central bank’s two percent target for most of 2022, and the labor market is showing some signs of cooling down. These two factors were used by policymakers to justify their caution in raising interest rates. For example, in addition to high inflation, employment data from September was lower than what many economists expected. Employment situation reports published by the Bureau of Labor Statistics track monthly job growth and unemployment rates.
What the Decision Means for Borrowers
Much of this year mortgage rates have stayed close to 7%, so the Fed’s decision to temporarily stop raising interest rates will not likely impact them. Consumers with variable rate debt such as credit cards or certain automobile loans will probably not find immediate relief from the Fed’s actions. Conversely, those who save money through deposits are still benefiting from higher yield options than other types of investments. Financial market analyses published by the Reuters evaluate central bank policy expectations.
Inflation and Growth Data Still to Come
Just one day following the Fed’s announcement of their decision on rates, there are some very important economic reports scheduled to be published. The Bureau of Economic Analysis is going to be publishing the first (or “advance”) reading of how much the U.S. economy grew during the third quarter. Also on the same day as the GDP report, the BEA is also going to be releasing the personal income and spending data for September. This is where you can find the Fed’s primary measure of inflation. Gross domestic product and personal consumption expenditure reports published by the Bureau of Economic Analysis analyze quarterly economic growth and core inflation metrics.
How Businesses Are Adjusting
Small business owners say they can’t afford to grow because of high interest rates. They can’t borrow money (equipment loans, lines of credit) at low interest rates as in the past. High interest rates are making it difficult for them to hire new employees, buy more stock/inventory, etc. until those rates drop. Economic research briefings published by the Federal Reserve Bank of New York review monetary policy transmission and financial conditions.
