28 October, 2026
Rate Decision: HOLD [3,75-4,00] (Expected: 3,75-4,00)
- The Federal Reserve left interest rates unchanged on October 28 in the 3.75% to 4.00% range, pausing policy tightening after the September hike. The decision triggered a limited market reaction, as the statement did not include a clear signal of another move in December.
- A few minutes after the release, the S&P 500 was up 0.1%, the Dow Jones rose 0.2%, and the Nasdaq 100 hovered near flat. The yield on 10 year US Treasury bonds stood at 5.03%, up 3 basis points from the previous close.
- The most notable aspect of the meeting was dissent from two Fed officials. Beth Hammack and Lisa Cook favored a 25 basis point hike. Cook’s vote was particularly surprising, as she had not previously dissented from the consensus on rate decisions.
- The split suggests that pressure to tighten policy further remains meaningful despite the October pause.
- For investors, the lack of a hike therefore does not mean the fight against inflation is over. September consumer price inflation came in at 3.7% year over year, and higher energy prices are making it harder for price pressures to fade. The Fed must balance the risk of inflation becoming entrenched against the costs of high rates for borrowers, the housing market, and businesses.
- Implications for equities remain mixed. The pause limits an immediate increase in the cost of money, but the prospect of further hikes may restrain valuation upside, especially for technology companies and highly leveraged firms.
- The market’s direction may be shaped by Kevin Warsh’s press conference. Key will be an explanation of why the Fed chose to wait despite elevated inflation, and what conditions would trigger the next hike. Ahead of the conference, the reaction remains muted, and the October decision should be interpreted as data dependence rather than a definitive shift in monetary policy.
- USD intially shows moderate weakness against other majors, but within minutes - it returns to the pre-decision levels. More sizable move might be expected after Kevin Warsh speech.
EURUSD (M1)
Source: xStation5
Warsh changes the game, Fed catches its breath [Post-FOMC Comment]
Daily Summary: Oracle drives the market higher, dollar weakens following Fed meeting (28.10.2026)
Interrogating reality or integrated by reality: Kevin Warsh Conference Summary
Time for a pause – what will determine the strength of the dollar? [Pre-FOMC Report]
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