Fed Decides Wednesday: A Hold Is Expected, but Inflation at 3.7% Keeps a December Hike in Play
Chair Kevin Warsh's Fed raised rates in September for the first time in three years. Core inflation is 2.6%.
The Federal Reserve will announce its interest-rate decision Wednesday, Oct. 28, at 2 p.m., WBTV reports, and economists expect it to hold rates steady before the midterms, with a possible increase in December.
The pressure is coming from prices. Consumer prices rose 3.7% from a year earlier in September, up from 3.4% in August, and 0.6% on the month, according to the Labor Department figures summarized by Chase. Core inflation, which excludes food and energy, rose 0.3% on the month and 2.6% over the year. Gasoline has driven much of the increase since the Iran war began.
The Fed raised rates by a quarter point in September, its first hike in more than three years, under Chair Kevin Warsh, who took office in May 2026. J.P. Morgan Wealth Management’s base case is a hold this week, with about 50 more basis points of increases before the Fed is done, timing undetermined. Fed officials say inflation remains too high, while New York Fed President John Williams said there is “no need for urgency.”
Why it matters. Higher rates fight inflation but raise the cost of mortgages, car loans and credit cards for families already squeezed at the pump. The Fed’s job is hard when the main driver is a war-related oil shock it cannot control.
The other side. Some economists argue the Fed should look through an energy shock and avoid hurting the job market; others warn that waiting risks letting inflation expectations take hold.
Open questions. Whether the Fed’s statement signals a December hike, and how markets react a week before the election.
- WBTV: Week Ahead in Washington, October 25
- Chase: Will the Federal Reserve hike rates at the October 2026 FOMC meeting?
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