The Federal Reserve is widely expected to hold its benchmark interest rate at 3.75% to 4.00% when it announces its decision at 2 p.m. ET on Wednesday, October 28, 2026. CME FedWatch put the odds of a hold at about 90% on October 27, with attention already turning to whether the Fed raises rates again in December.
Key Takeaways
- The federal funds target range has been 3.75% to 4.00% since September 17, after a unanimous quarter-point increase, the Fed’s first hike since July 2023.
- CME FedWatch showed roughly a 90% probability of no change on October 28.
- In September projections, the median Fed official saw the rate ending 2026 at about 4.1%, implying one more increase this year.
- 16 of 18 Fed participants projected at least one additional hike in 2026.
- The prime rate, which drives many credit card and home equity line rates, sits at 7% after September’s increase.
The Fed Raised Rates In September For The First Time Since 2023
The Federal Open Market Committee voted 12 to 0 on September 16 to raise the federal funds target range by a quarter point, from 3.50% to 3.75% up to 3.75% to 4.00%. It was the first increase since July 2023, reversing a period in which the Fed had been cutting rates.
Inflation drove the decision. Federal Reserve Chair Kevin Warsh said at the time that total PCE prices, the Fed’s preferred inflation gauge, likely rose about 3.6% over the 12 months through August, with too many categories still posting increases above 3%. The Fed’s target is 2%.
Why A Hold Is Expected This Week
The two-day meeting began October 27. Markets largely expect the Federal Reserve to pause and watch how September’s increase works through the economy before acting again. Minutes from the September meeting, released October 7, showed most participants believed another increase would likely be appropriate by year end, while stressing that decisions would depend on incoming data.
That makes October 28 less about the rate itself and more about the message. There are no new economic projections at this meeting, so Warsh’s press conference after the decision will be the main signal for December.
What The Fed Projected For The Rest Of 2026
The Federal Reserve’s September Summary of Economic Projections showed the median participant expecting the federal funds rate to end 2026 at about 4.1%, equivalent to a 4.00% to 4.25% range. That implies one more quarter-point increase in either October or December.
Of the 18 officials who submitted projections, 16 expected at least one more increase this year. Only two saw rates staying at the current level. The same median projection showed the rate holding steady through 2027, with cuts in 2028 and 2029.
What A Hold Means For Credit Cards And Home Equity Lines
Credit card rates move most directly with the Federal Reserve. Most cards carry variable rates tied to the prime rate, which banks typically set three percentage points above the top of the Fed’s target range. After September’s increase, the prime rate stands at 7%.
A hold on October 28 would keep the prime rate where it is, so card rates would not change this month. A December increase, however, would push prime to 7.25%, and card rates would generally follow within one or two billing cycles. Home equity lines of credit, which also track prime, would move the same way.
For households carrying balances, the next two months offer a window to pay down variable-rate debt or ask lenders about fixed-rate options before any further increase.
What It Means For Mortgages And Auto Loans
Mortgage rates do not move in lockstep with the Federal Reserve. Thirty-year fixed rates follow longer-term Treasury yields, which respond to inflation expectations and the Fed’s outlook more than to any single meeting. A hold paired with signals of a December increase could still keep mortgage rates elevated.
Auto loan rates are shaped partly by the Fed’s moves and partly by lender competition. Buyers financing a vehicle before year end may see little change from an October hold, but lenders often price in expected increases ahead of time.
What It Means For Savers
Savers have benefited from higher rates. Yields on high-yield savings accounts, money market accounts and certificates of deposit tend to rise when the Federal Reserve raises rates and hold steady when it pauses. With another increase possible in December, savings yields are unlikely to fall in the near term.
The labor market adds context for household planning. Hiring has slowed, with U.S. job openings falling to 7.1 million in August, a sign the Fed’s higher rates are already cooling parts of the economy.
FAQs
When Is The Next Fed Meeting?
The Federal Reserve’s current meeting runs October 27 and 28, 2026, with the rate decision at 2 p.m. ET on October 28. The final meeting of 2026 is in December.
What Is The Federal Funds Rate Right Now?
The federal funds target range is 3.75% to 4.00%, in effect since September 17, 2026.
Will The Fed Raise Rates In 2026?
The Fed’s September projections showed the median official expecting one more quarter-point increase before the end of 2026. Markets expect a hold in October, which makes December the likelier meeting for an increase.
How Does The Fed Rate Affect Credit Cards?
Most credit cards have variable rates tied to the prime rate, which moves with the Fed’s target range. When the Fed raises rates, card rates generally rise within one or two billing cycles.
