Fed holds at 3.75%–4% with two dissents for a hike

The Federal Reserve left its federal funds target range at 3.75%–4.00% on Wednesday, October 28, 2026, but the 10–2 vote shows how close the committee is to another increase: Governor Lisa Cook and Cleveland Fed President Beth Hammack both dissented in favor of a quarter-point hike. At his press conference, Chair Kevin Warsh also announced that one of the Fed's eight meetings in 2027 will be a strategy session with no rate vote, so the Fed will set rates seven times next year instead of eight. Futures traders now put the odds of a hike at the December 8–9 meeting at about 83%.

The decision in five lines

• Target range unchanged at 3.75%–4.00%, six weeks after the September 16 hike (the first since July 2023).
• Vote 10–2; both dissenters wanted a 25 bp hike — none argued for a cut.
• Interest on reserves stays 3.90%, the discount rate 4.00% (Fed implementation note).
• From 2027, 7 of 8 FOMC meetings will be rate-setting; Warsh expects 6 of 8 in 2028.
• CME FedWatch odds of a December hike: 82.6%, up from 78.3% a day earlier (Fox Business).

What the Fed said

The statement describes economic activity as "expanding strongly", with robust capital investment and an unemployment rate that has changed little. On prices it repeats that inflation "remains elevated" — the latest CPI report from the BLS showed headline inflation of 3.7% over the 12 months to September and core inflation of 2.6%. The committee said it will gather more information before judging the policy stance needed to bring inflation back to 2%, and added a short line: "The Committee will deliver price stability."

The two dissents matter more than the hold itself. In September the hike passed 12–0; this time two voters wanted to keep going immediately, and nobody on the committee pushed back toward easing. Warsh, chair since May, does not give forward guidance, Reuters noted, so the vote split is the clearest signal investors got about December.

The rate path since 2022

The September hike reversed one of the six cuts made in 2024–2025. Dates below are the days the new range took effect, as listed in the Federal Reserve's open market operations table.

Effective date	Change	Target range
Jul 27, 2023	+25 bp	5.25%–5.50% (peak)
Sep 19, 2024	−50 bp	4.75%–5.00%
Nov 8, 2024	−25 bp	4.50%–4.75%
Dec 19, 2024	−25 bp	4.25%–4.50%
Sep 18, 2025	−25 bp	4.00%–4.25%
Oct 30, 2025	−25 bp	3.75%–4.00%
Dec 11, 2025	−25 bp	3.50%–3.75%
Sep 17, 2026	+25 bp	3.75%–4.00%
Oct 28, 2026 meeting	hold (10–2)	3.75%–4.00%

Two derived numbers put this in context. The 2024–2025 easing cycle cut a total of 175 basis points; the Fed has now taken back 25 of them. And the range is exactly where it stood a year ago, after the October 2025 cut — but now with headline CPI at 3.7%, which is why the debate has flipped from "how many more cuts" to "how many more hikes". From January through July 2026 the Fed held five times in a row before moving in September.

How Treasury yields reacted

Short-term yields slipped and long-term yields rose on decision day, according to the Treasury's daily par yield curve:

Treasury par yield	Oct 27	Oct 28	Change
3-month bill	4.22%	4.18%	−4 bp
2-year note	4.70%	4.67%	−3 bp
10-year note	4.99%	5.05%	+6 bp
30-year bond	5.30%	5.37%	+7 bp

The gap between the 10-year and 2-year yields widened from 0.29 to 0.38 percentage points in a day. The 10-year is back above 5% but still 26 basis points below its October 5 close of 5.31%. Our earlier report covers the 10-year yield's biggest one-day drop since 2024 on October 22.

3-month2-year10-year

	3-month	2-year	10-year
Oct 1	4.17	4.78	5.24
Oct 5	4.22	4.84	5.31
Oct 7	4.22	4.77	5.28
Oct 9	4.25	4.8	5.24
Oct 13	4.26	4.79	5.21
Oct 15	4.28	4.77	5.1
Oct 19	4.27	4.77	5.15
Oct 21	4.25	4.81	5.13
Oct 22	4.22	4.65	4.96
Oct 23	4.22	4.69	5
Oct 27	4.22	4.7	4.99
Oct 28	4.18	4.67	5.05

What it means for cash, bonds and stocks

Cash. Money market funds and T-bills track the policy rate, not the 10-year. With the 3-month bill at 4.18% and headline CPI at 3.7%, the real yield on cash is about 0.48 percentage points before tax — positive, but thin.

Bonds. A rough rule: price change ≈ −duration × yield change. A bond fund with a 6-year duration lost about 0.36% on the 6 bp rise in the 10-year on October 28 (6 × 0.06). Long-duration funds are the most exposed if a December hike pushes long yields back toward the early-October highs.

Stocks. The indexes barely moved — Fox Business reported the S&P 500 up 0.26% and the Nasdaq up 0.17% in the final hour of trading. A 10-year yield above 5% keeps pressure on valuations, which is one reason a diversified portfolio's result is worth checking against a benchmark rather than in isolation; see our 60/40 rebalancing backtest for how stocks and bonds have offset each other.

Fewer rate decisions from 2027

The Fed's published 2027 calendar still lists eight two-day meetings, and Warsh called eight the "right number", according to Reuters. What changes is their use: in 2027 one meeting will be devoted to longer-term strategy, with no federal funds vote and no policy statement; in 2028 two will be. The Fed has held eight scheduled meetings a year since 1981, Yahoo Finance noted.

Warsh did not say which 2027 meeting will be the strategy session. Omair Sharif of Inflation Insights told Reuters he expects October 2027, which falls between two meetings with economic projections and would leave 12 weeks between rate decisions. The Fed can still move between meetings, as it did in early 2020 during COVID-19.

For investors the practical effect is fewer scheduled dates on which rates can change, and more weight on each CPI and jobs report in between.

What to watch next

Date	Event	Why it matters
Nov 3, 2026	Congressional elections	Fiscal outlook and Treasury supply
Nov 10, 2026	October CPI (BLS, 8:30 a.m. ET)	The main input for December; September was 3.7%
Dec 8–9, 2026	FOMC meeting with projections	Futures price ~83% odds of a hike to 4.00%–4.25%
Jan 26–27, 2027	First FOMC meeting of 2027	First meeting under the new 7-decision year

Background on the September inflation report is in our CPI and 2027 Social Security COLA report. To see how rate moves show up in your own holdings, GetHossa compares your portfolio with the S&P 500 across all your brokerage accounts.

Methodology and sources

The decision, vote and dissents come from the FOMC statement; the reserve and discount rates from the implementation note; the rate history from the Fed's open market operations table (effective dates). Yields are Treasury daily par yields. Derived figures — the 175 bp cutting cycle, the 10-year minus 2-year spread, the real cash yield (4.18% − 3.7%) and the money market example — are our arithmetic on those numbers; the 4.20% fund yield is illustrative. Futures odds are CME FedWatch figures as reported by Fox Business on October 28.

This article is for information only and is not investment advice.