The essentials
The Fed held rates at 3.75% to 4% on a 10-2 vote, with two dissenters favoring a hike.
The Federal Reserve kept its federal funds rate unchanged in the 3.75% to 4% range. The Federal Open Market Committee voted 10-2 to hold rates steady, with Lisa Cook and Beth Hammack dissenting in favor of a quarter-point rate hike.
The policy statement said inflation remains elevated while economic activity expands, and that more information will guide the policy stance. Chair Kevin Warsh reiterated that the inflation target is 2%, measured by the Personal Consumption Expenditures (PCE) price index.
The hold follows the 25-basis-point increase in September 2026. The committee also announced that it will hold eight meetings per year starting in 2027.
The statement's open-ended language leaves the timing and direction of any further changes undetermined.
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Two dissenters argue inflation warrants a higher rate now
Cook and Hammack voted for a quarter-point increase, signaling that they view elevated inflation as sufficient reason to tighten again soon after the September move. From this vantage, a hold risks allowing price pressures to persist above the 2% target Warsh has reiterated. The split shows the committee is not unified on whether the September hike has done enough.
Ten officials back a pause, citing need for more information
The majority of ten voters chose to hold, relying on the statement's note that more information will guide policy. From this view, a pause lets officials assess the effects of the September increase while economic activity continues to expand. The open-ended language preserves flexibility rather than committing in advance to another hike.