Patience expected from Fed in final rate decision before midterms

WASHINGTON — The Federal Reserve is expected to leave its benchmark for short-term interest rates unchanged today, holding off on another increase even as inflation remains elevated. While a pause is not guaranteed, it would keep the central bank's target range at 3.75% to 4% after officials raised

Markets & Economy

SEE ALL

Reuters

GM moves to Nasdaq as first legacy automaker on the exchange (Oct 27)

Reuters

Factbox-Major brokerages expect Fed to hold rates ahead of policy meeting

Trendline

Marathon Petroleum, PBF Energy, and Phillips 66 Highlighted Amid Strong Refining Industry Outlook

What is the story about?

WASHINGTON — The Federal Reserve is expected to leave its benchmark for short-term interest rates unchanged today, holding off on another increase even as inflation remains elevated.

While a pause is not guaranteed, it would keep the central bank's target range at 3.75% to 4% after officials raised it last month for the first time in three years.

The Fed typically raises the range to tame the pace of rising prices and lowers it to stimulate the job market. Policymakers remain focused on inflation that is still well above the Fed's target and outpacing workers' pay growth. However, most forecasters believe Fed officials will hold the range steady at the end of its October meeting. A pause would give them more time to assess the last hike's effects

and see whether midterm elections may impact the timeline for war in Iran — a major driver of this year's inflation.

For borrowers, patience this month wouldn't undo September's increase. If they haven't noticed it already, they may soon. It often takes one to two billing cycles before a rise in the federal funds rate translates to a similar uptick in credit card APRs, for example. But holding steady today would mean the Fed isn't guiding them, or other borrowing costs, even higher — at least for now.

If officials do opt for a pause, it could be short-lived. Forecasters expect another quarter-percentage-point increase in December, after the Fed's final meeting of the year.

Follow along today with USA TODAY's live coverage of the October rate decision, which is expected at 2 p.m. ET, and Fed Chair Kevin Warsh's news conference that is scheduled to begin at 2:30 p.m. ET.

U.S. Federal Reserve Chairman Kevin Warsh holds a press conference following a two-day meeting of the Federal Open Market Committee (FOMC), as the Federal Reserve holds interest rates steady, at the Federal Reserve, in Washington, D.C., U.S. July 29, 2026. REUTERS/Evelyn Hockstein

Where do Fed officials think rates are headed?

08:17 AM ET, October 28 2026, Rachel Barber

Most members of the Federal Open Market Committee signaled in September that they expect at least one additional rate hike this year.

While just 12 get to vote on rate decisions, 19 people serve on the committee. Each quarter, they have the option to submit their projections for the rate path. Warsh, as usual, didn't participate in the report released last month, leaving Fed watchers with 18 projections to review.

Of them, two believed no further hikes were necessary before the end of 2026. But 12 expected one additional quarter percentage point increase, and four saw room for either two quarter percentage point increases or a half percentage point hike.