TLDR: The Fed held at 3.75-4.00% on October 28, 2026, after September's 25bp hike. Both dissents wanted a hike: Governor Cook and Cleveland's Hammack, for a 10-2 vote. The statement upgraded growth to "strong" and swapped September's hike rationale for data-dependence: a pause with the tightening bias intact. No SEP was released. Hikes were trimmed, not dropped or pushed back: after the meeting futures priced 68bp through December 2027, down 4bp, almost all of it in 2027 after Warsh cut the number of rate-setting meetings.
Decision and vote
The hold was fully priced; the information was in the dissents. The Committee kept the target range at 3-3/4 to 4 percent and repeated its "ample reserves" language. The vote went from 12-0 in September to 10-2, with Lisa Cook and Beth Hammack preferring a 1/4 point hike (Federal Reserve). Hammack also dissented for a hike in July; a governor joining her is the new signal. Futures priced about a 92% chance of a hold at the October 27 close.
Statement: three edits, all pointing the same way
The wording reads as a conditional pause with hikes still the next move.
| Element | September 16 | October 28 | Read |
|---|---|---|---|
| Decision | Raise target range 1/4 pt to 3-3/4 to 4 percent | Maintain target range at 3-3/4 to 4 percent | Pause after hike |
| Vote | 12-0 | 10-2; Cook, Hammack preferred +1/4 pt | Hawkish dissents |
| Activity | Expanding at a solid pace | Expanding at a strong pace | Growth upgrade |
| Inflation | Remains elevated | Remains elevated | Unchanged |
| Guidance | Today's policy action will support a timelier return to 2 percent | Accumulation of more information will help determine the stance to ensure a timely return of inflation to 2 percent | Data-dependent, no pre-commitment |
| Labor | Job gains kept pace with workforce; unemployment changed little | Unchanged | Unchanged |
The upgrade from "solid" to "strong" sits next to unchanged "inflation remains elevated" language, a combination that does not fit an easing bias. The forward guidance is the only line that can be read dovishly: "the accumulation of more information" avoids pre-committing to December, but it is paired with "ensure a timely return," and two voters wanted to move today.
At the press conference, Chair Kevin Warsh said the "monetary medicine" is starting to work "some" and that, while conditions are tighter, he is "unwilling and unable to call them tight" (Bloomberg). He also said that from 2027 one of the eight meetings will be a strategy session with no rate vote or statement (CNBC).
No new SEP: September remains the benchmark
The standing September 16 SEP is the yardstick for market pricing, and it had already turned hawkish. Against June, the median policy path rose 30-50bp in each year from 2026 to 2028, unemployment came down 0.2pp and 2026 headline and core PCE each rose 0.1pp (Federal Reserve).
| Variable | 2026 | 2026 chg (pp) | 2027 | 2027 chg (pp) |
|---|---|---|---|---|
| Fed funds | 4.1 | +0.3 | 4.1 | +0.5 |
| Real GDP | 2.3 | +0.1 | 2.4 | +0.1 |
| Unemployment | 4.1 | -0.2 | 4.1 | -0.2 |
| PCE inflation | 3.7 | +0.1 | 2.3 | 0 |
| Core PCE | 3.4 | +0.1 | 2.5 | 0 |
The dots end the cycle at year-end 2026. Twelve of 18 participants put 2026 at 4.125%, one more hike; four were at 4.375% and two saw no further move. The 2027 dots run from 3.125% to 4.375%, with eight at the top, but the median holds at 4.1%, so the median participant stops hiking after December.
Repricing: hikes trimmed at the margin, not dropped or pushed back
Going in, the market was rebuilding hikes after a safe-haven scare; the meeting trimmed 2027, not December. On October 22 an AI-led equity selloff sent the 10-year down about 19bp (CNBC) and cut cumulative hikes through December 2027 to 60.5bp. They were back to 72.2bp by the October 27 close and settled at 68.1bp after the meeting, with December almost unchanged and 2027 down 3.4bp.
| Horizon | Oct 22 (low) | Oct 27 (pre-meeting) | Oct 28 (post-meeting) | Chg [Oct 28 vs Oct 27] |
|---|---|---|---|---|
| 2026 (Dec 9 meeting) | 20.4 | 22 | 21.3 | -0.7 |
| 2027 (Jan 27 to Dec 8) | 40.1 | 50.2 | 46.8 | -3.4 |
| Through Dec 2027 | 60.5 | 72.2 | 68.1 | -4.1 |
The press conference moved the front end more than the statement did. The 2-year rose as much as 5bp after the 2pm release, then gave it back and turned lower once Warsh announced the strategy-only meeting, closing near 4.71% versus 4.77% before the decision. The 10-year finished higher, just above 5%, and the curve steepened (CNBC, Bloomberg).
Market-implied fed funds midpoint by FOMC meeting (%): Oct 27 pre-meeting vs Oct 28 post-meeting, vs Sept SEP median
Source: Oasive · 10 data points
Probability-weighted midpoint of futures-implied target-range buckets; Oct 28 is the 4:22 pm ET post-meeting snapshot, its first point the target midpoint after the hold
The market sits above the Fed's own dots. After the meeting, end-2026 pricing (about 4.09%) matches the September median of 4.1%. End-2027 pricing (about 4.56%) is roughly 45bp above the median and above the highest 2027 dot.
Fed repricing: what decides December
December went into the release as the base case for a hike and came out firmer: fed funds futures priced about 82% at the October 27 close and 85% after the press conference, following September minutes in which most officials judged another increase likely appropriate by year-end (Federal Reserve). Warsh's meeting cut trimmed 2027 hikes without touching December, which favors the front end over duration while long yields stay pinned above 5%. Next tests:
- Nov 6: October employment report (BLS)
- Nov 10: October CPI; Nov 13: October PPI (BLS)
- Dec 9: FOMC decision with a new SEP and dots
Key takeaways
- This was a hawkish hold, not a pivot. Both dissents wanted a hike, growth was upgraded and inflation is still "elevated." The data-dependence line keeps December open without changing the direction of travel.
- December is a live hike meeting, priced at about 85% after the October 28 meeting. It brings a new SEP: watch whether the 2027 median moves toward the market's roughly 4.55%, or holds the September view that hikes stop at year-end.
- The front end prices more tightening than the Committee projects. That puts the risk in the 2027 strip if December's dots do not validate it; hot October payrolls or CPI would instead pull the dots up toward the market.
- The curve is steepening into the pause. With the 10-year above 5% and the 2-year slipping after the press conference, Warsh's refusal to call conditions tight suggests the Fed is unlikely to lean against higher long rates.
- Oasive economic data
- U.S. Department of the Treasury