U.S. FOMC Meeting (October 27-28, 2026)

FOMC holds rates steady, but two voters' dissent  

• The Federal Open Market Committee (FOMC) held the policy rate steady, with the target range at 3.75%-4.0% after hiking by 25 basis points at the prior meeting. The move was widely expected, with fed funds futures showing only a 7% chance of a hike immediately before the announcement.  
• Few changes were made to the post-meeting statement, with one notable call out being the upgrade to the Committee's assessment on economic activity expanding at a "strong" pace versus its prior characterization of "solid".  
• Inflation is still seen as "elevated" with the statement noting that "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% goal". This suggests that the Committee remains data dependent and further policy tightening is not on a preset course.  
• There were two dissenters on today's decision, with Lisa Cook and Beth Hammack voting in favor of another quarter-point hike. 

Key Implications

• Rather than pushing ahead with another hike, the FOMC opted for a more gradual approach to policy tightening and skipped today’s meeting. While the decision had been largely expected, it feels inconsistent with Chair Warsh's inflation fighting rhetoric emphasized at Jackson Hole, particularly following September's hotter CPI report.  
• In our view, today’s pause increases the likelihood of another quarter-point hike in December. Although financial conditions have tightened in recent weeks, they remain accommodative by historical standards – a point likely to be reinforced in Thursday’s Q3 GDP report, with growth expected at 3.5%. With demand still firm and oil prices elevated, the Fed will need to tighten policy further to limit the pass-through to core inflation. The extent of additional tightening will remain data-dependent, but at least one more hike by year-end is a safe bet.   

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