The Federal Reserve held steady on rates at the conclusion of its October meeting, maintaining its target range of 3.75% to 4%.
Two members of the Federal Open Market Committee dissented from the decision: Governor Lisa Cook and Cleveland Fed President Beth Hammack were in favor of raising rates by a quarter percentage point.
Fed Chairman Kevin Warsh announced that the central bank will reduce he number of rate-setting meetings starting in 2027, noting that while eight meetings per year is “the right number” for the FOMC, one of them will focus exclusively on broad monetary policy strategy starting in 2027. The remainder will be policy-setting meetings.
In 2028, the Fed will plan to host two meetings focused on strategy discussions and the remaining six will be centered on policy setting, Warsh said.
Federal Reserve should be raising rates, said DoubleLine’s Jeffrey Gundlach
Inflation remains hot, the economy is strong – and that means the Federal Reserve should be lifting rates, according to bond investor Jeffrey Gundlach.
“I think the Fed should be raising interest rates, based upon the 2-year Treasury being at 4 and three-quarters percent, and now the yield curve in the wake of this news conference is steepening again,” Gundlach, CEO and CIO of DoubleLine Capital, said on CNBC’s “Closing Bell” after Fed Chair Kevin Warsh wrapped up his news conference.
The 2-year Treasury yield, which is sensitive to Fed policy, was last trading at 4.714%.
At the Fed’s press conference, which came after central bank policymakers opted to hold rates steady at a range of 3.75% and 4%, Warsh highlighted the strength of the economy.
“Broadly, what I heard in the room the last couple of days is consistent with my own views, which is the economy is strong,” the central bank leader said.
Gundlach noted that it’s not clear why the Fed is holding steady on rates.
“What are you waiting for? You just upgraded the economy right here,” he said, referring to Warsh’s comments at the press conference.
Read more from CNBC’s Davis Giangiulio on Gundlach’s comments here.
—Darla Mercado
Warsh tells the market again that he doesn’t favor ‘forward guidance’
Federal Reserve Chairman Kevin Warsh repeated again in his Wednesday press conference that he does not favor the Federal Reserve signaling the future path of interest rates and monetary policy in a process known colloquially as “forward guidance.”
“I don’t believe in forward guidance, absent exigent circumstances, absent a crisis,” Warsh told reporter after the Fed kept its benchmark fed funds rate unchanged at 3.75% to 4.00%.
“I have to give that caveat because in the darkest days of the 2008 financial crisis, in part using some literature and thinking from a very recent Nobel Prize winner, that kind of forward guidance is actually quite helpful. But in normal, ordinary times, especially times where the underlying deal economy is this strong, I don’t believe in it. I don’t favor it.”
— Scott Schnipper, Fred Imbert
Warsh on impact of rates on AI buildout: ‘Interest rates have had an effect’
Warsh said higher interest rates have had an effect on the artificial intelligence infrastructure buildout.
“Interest rates have had an effect,” Warsh said. “You see market participants that are discriminating between the kinds of investments they want to make. You’ve seen credit spreads for certain assets widen out, gap out. For others, you’ve seen some tightening in financial conditions, but not significantly.”
“I don’t believe that they’re somehow divorced from the rest of the economy,” he added.
To be sure, Warsh said the capital expenditure story is “not just strong, but it is broadening.” He said it’s “much harder” to argue that economic strength is driven by a a small group of sectors today than it was several quarters prior.
— Alex Harring
Warsh says change in meeting schedule will allow Fed time to think about ‘big questions’
Federal Reserve Chair Kevin Warsh answers questions as he delivers remarks during a news conference following the Federal Open Market Committee meetings at Federal Reserve Headquarters on October 28, 2026 in Washington, DC.
Alex Wong | Getty Images
The public will be hearing less from the Federal Reserve when it comes to interest rate decisions.
Warsh announced Wednesday that the central bank will alter its meeting schedule in coming years, seemingly part of his plans to pare back the implant that he and his colleagues have on financial markets.
Under the details Warsh revealed, the Federal Open Market Committee will still meet eight times a year.
However, unlike the current system in which the panel votes on where it will set its benchmark interest rate, one of those meetings in 2027 will focus solely on strategy. In 2028, there will be two strategy sessions.
“We believe eight meetings per year is the right number for the FOMC,” Warsh said, but noted the committee doesn’t need to vote at each one.
“What’s the reasoning behind this change? To me, it’s quite straightforward,” he added. “Getting policy right involves assessing near-term developments at timely, regular, and information-rich intervals.
“But it’s equally important we reserve time and space as an intellectually diverse group for strategic deliberations, for thinking anew about big questions, looking out over longer time horizons, focusing, as I say, on the left side of the decimal point.”
Warsh has emphasized the importance of “regime change” at the Fed, a process that has entailed the establishment of multiple task forces aimed at looking at how the central bank operates. One such task force will address communication issues.
The meeting change appears to be a first step in the process of changing the Fed’s approach.
“I believe the setting of the meeting schedule and agenda is more than some administrative detail. It’s an institutional choice, affecting the nature and the quality of our deliberations, and ultimately the wisdom of our decisions,” he said. “It’s yet another change to get the conduct of monetary policy on the right track.”
—Jeff Cox
Warsh says approaching midterms did not influence Fed decision
Federal Reserve Chairman Kevin Warsh said politics did not influence Wednesday’s decision to maintain rates.
“I just spent two days with my colleagues upstairs. I didn’t hear an utterance about politics. I didn’t hear a reference to politics, elections, what’s happening in the next week or so,” Warsh said. Midterm elections are scheduled for Nov. 3.
“Didn’t hear anything about it, and I don’t believe it had any role in the decision, not just for me, but my colleagues around the room,” he said.
— Ananya Chetia
Warsh doesn’t anticipate making rate decision or releasing statement at broad policy meetings
Federal Reserve Chair Kevin Warsh delivers remarks during a news conference following the Federal Open Market Committee meetings at Federal Reserve Headquarters on Oct. 28, 2026 in Washington, DC.
Alex Wong | Getty Images
At these policy meetings that will specifically focus on broad strategy, Warsh said he doesn’t anticipate that the Fed will make a rate decision or release a statement.
He then said “it’s not obvious yet” what the Fed would share following these meetings.
“There’s more news to come on that,” Warsh said. “The decision on the new format for the meetings is relatively new.”
Warsh said there was a “robust discussion” on how to handle these meetings over a few gatherings.
— Alex Harring
Warsh says economic growth has strengthened
Federal Reserve Chairman Kevin Warsh said economic growth has been positive after the agency maintained rates at its October meeting, keeping rates at a range between 3.75% and 4%.
“Economic growth has strengthened. The GDP increase in the first half of this year was revised up from an earlier estimate of 1.8 percent up to 2.4 percent, and the third quarter appears to have brought an even more rapid advance,” Warsh said.
— Ananya Chetia
Warsh says price stability mandate is focus, employment has been ‘quite positive’
US Federal Reserve Chair Kevin Warsh speaks during a press conference following the Federal Open Market Committee’s interest-rate decision in Washington, DC, on October 28, 2026.
Saul Loeb | Afp | Getty Images
Warsh said the Fed’s discussion over recent days “focused mainly on the price stability side of our remit.”
He said the full employment side of its dual mandate has been “quite positive,” citing a decreasing jobless rate compared with a year ago. Warsh also noted that the unemployment insurance claims volume, when looking at a four-week average, is at “the lowest level in generations.”
— Alex Harring
Fed to cut back rate-setting meetings
Fed Chairman Kevin Warsh said the central bank will cut back on the number of meetings where members vote on rates.
Said Warsh: “We believe eight meetings per year is the right number for the FOMC, but in 2027, one meeting will focus exclusively on broad monetary policy strategy, with neither a vote on the federal funds rate nor a policy statement anticipated. The rest will be regular FOMC policy setting meetings, and I expect that in 2028 we’ll have two meetings dedicated discussions of strategy and six for setting policy.”
Later Warsh added that he doesn’t “anticipate” making a policy decision during these strategy meetings.
—John Melloy
Warsh says financial conditions have tightened since decision to raise rates in September
Fed Chairman Kevin Warsh said that following the decision by the central bank to raise interest rates by 25 basis points at its September meeting, there are signs that financial conditions have tightened since.
“We have started to see some changes in financial and credit conditions; they have tightened for some businesses and households, much as we would expect,” he said. “Market participants are becoming somewhat more discerning in their capital allocations.”
He added, though, that he wouldn’t call financial conditions broadly “tight,” but rather they are helping create a path toward price stability.
— Davis Giangiulio
Cook’s dissent could be ‘protest vote,’ economist says
Lisa Cook, governor of the US Federal Reserve, during the Stanford Institute for Economic Policy Research (SIEPR) Policy Forum at Stanford University in Stanford, California, US, on Wednesday, May 27, 2026.
David Paul Morris | Bloomberg | Getty Images
An unusual dissent from a Fed Governor on the rate decision could stem from anger over the legal actions of President Donald Trump’s administration’, according to Chris Rupkey, chief economist at FWDBONDS.
Federal Reserve Governor Lisa Cook was one of two dissenters on Wednesday’s decision to keep rates unchanged. Cook has battled the White House in court after Trump attempted to fire her. Trump has cited mortgage fraud, allegations that she has denied.
It’s “very rare to see a Fed governor dissent, they are sitting right there in the same building as the Chairman,” Rupkey said. “This could have been a protest vote as the Trump administration is taking steps to get Fed governor Cook to resign one way or another.”
— Alex Harring
The Fed’s past hawkishness is a matter of ‘kabuki theater’
US Federal Reserve Chair Kevin Warsh speaks during a news conference at the William McChesney Martin Jr. Federal Reserve Board Building in Washington, DC, on September 16, 2026.
Saul Loeb | Afp | Getty Images
The Federal Reserve’s decision to hold rates steady at the October meeting suggests the central bank’s prior hawkish stance was a matter of empty showmanship, according to Cem Karsan, founder and CIO at Kai Wealth.
“This, in my opinion, is kabuki theater,” Karsan told CNBC’s “Power Lunch” on Wednesday. “At the end of the day, they’re trying to gain credibility. Keep the Fed independent for now, ultimately, in terms of what they’re saying. But ultimately, the only way to respond to what’s important, which is the long end of the curve, is through more dovishness from the Fed, which will be coming in the months and quarters to come. I believe that is the next move.”
“This is a matter of credibility. This is a matter of trying to state that they are being thoughtful of inflation,” he continued. “But at the end of the day, nothing has changed going into Jackson Hole, and nothing has changed coming out.”
— Sarah Min
Fed policymakers seek ‘accumulation of more information’ to determine next steps
In its post-meeting statement, the Fed indicated it will need more data to guide its next steps on policy.
“Inflation remains elevated,” central bank policymakers said in the statement.
“The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal. The Committee will deliver price stability.”
Read more from CNBC’s Alex Harring on what’s changed in the Fed’s statement.
—Darla Mercado
Federal Reserve keeps rates steady
Central bank policymakers opted to hold rates at their current target range of 3.75% to 4%, a move that traders largely expected.
Two members of the Federal Open Market Committee dissented from the decision: Governor Lisa Cook and Cleveland Fed President Beth Hammack were in favor of raising rates by a quarter percentage point.
Read more from CNBC’s Jeff Cox on the Fed’s decision.
—Darla Mercado
Where markets stand ahead of the Fed’s rate decision
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, US, on Monday, Oct. 26, 2026.
Michael Nagle | Bloomberg | Getty Images
The three major averages were mixed as the Federal Reserve’s rate decision approached.
As of 1:40 p.m. ET, the S&P 500 was up 0.2%, while the Dow Industrials gained 135 points, or 0.3%, on the day. The Nasdaq Composite traded near the flatline.
S&P 500 in the past day
The U.S. 10-year Treasury yield was up more than 2 basis points at 5.02%, while the 2-year yield gained almost 3 basis points to 4.766%.
—Darla Mercado
Fed hold could be ‘prolonging our agony,’ says CIO Group’s Wieting
If the Fed waits until December to lift rates, it would “just be prolonging our agony,” said Steven Wieting, co-founder of the CIO Group.
Fed funds futures traders are largely expecting the central bank to keep rates unchanged on Wednesday and then raise them in December. Traders are placing just around 7% likelihood of a 25 basis point hike on Wednesday, according to CME’s FedWatch tool.
But Wieting told CNBC on Wednesday that there’s a chance that central bank policymakers may not hold off after Fed Chairman Kevin Warsh has signaled that inflation remains too high. He said raising rates now “may be better” than not doing so until December.
“I’m not predicting action today,” Wieting said. “But the chance that they actually shock us now is above 7%.”
— Alex Harring
Where consumer rates are standing before the Fed’s decision
In an aerial view, two-story single family homes line the streets of a neighborhood on Sept. 23, 2026 in Thousand Oaks, California.
Kevin Carter | Getty Images
While the Federal Reserve is largely expected to stand pat on its key interest rate on Wednesday, consumer rates have edged higher since policymakers pushed through their first hike last month.
The average 30-year fixed rate mortgage now sits at 7.33%, up from 7.12% last month, according to MND. Mortgage rates are closely tied to movement in the 10-year Treasury yield, which is now just below 5%.
The cost of borrowing against the equity in your dwelling – a home equity loan – has also risen and is now at 8.77%, versus 8.28% in September, according to Bankrate.
Savers have seen some marginal gains in the past month since the Fed lifted its rate by a quarter percentage point in September. The average money market annual yield is now at 0.45%, up one basis point from last month, according to Haver. The annual percentage yield on a five-year certificate of deposit is at 1.83%, up eight basis points from September, per Haver.
—Darla Mercado, Nick Wells
Fed funds futures traders have dramatically shifted expectations over the past month
Fed funds futures traders now widely expect the central bank to keep rates unchanged today. But that wasn’t always the case.
Futures indicate a nearly 93% likelihood that rates are holding steady, according to the latest data from CME’s FedWatch tool. A month earlier, traders were forecasting a less than 30% probability of rates staying unchanged.
The market adjusted expectations as Fed officials signaled that the central bank can take its time before making another move.
New York Fed President John Williams said “there is no need for urgency” after its September hike, which was the central bank’s first in three years.
Philip Jefferson, the Fed’s vice chair, said members of the central bank would “need to come to our own judgment, which may take more time.” Jefferson noted that yields increased following the Fed’s September decision, indicating that investors are watching macroeconomic shifts.
— Alex Harring
Here’s what the Fed decision means for your money
A shopper holds twenty dollar US banknotes inside a store in the Chinatown neighborhood of San Francisco, California, US, on Monday, July 13, 2026.
David Paul Morris | Bloomberg | Getty Images
The Federal Reserve’s decision to raise rates at its last meeting boosted borrowing costs, and the expectation that more rate increases are in the pipeline means consumers are unlikely to see much relief anytime soon. Those elevated borrowing costs are adding to existing affordability challenges, particularly for lower- and middle-income consumers.
As long as the Federal Reserve keeps rates at the current target range of 3.75% to 4%, consumers are unlikely to see much relief. Elevated borrowing costs are adding to existing affordability challenges, particularly for lower- and middle-income consumers.
Higher rates continue to affect credit cards, auto loans and mortgages. Credit card rates have climbed to their highest levels since late 2025, while 30-year mortgage rates have remained above 7%, making homeownership less affordable. Auto loan rates have also stayed near 7%, with even higher rates common in the used-car market.
One bright spot is savings. High-yield savings accounts continue to offer relatively strong returns compared with traditional bank accounts.
Some experts suggest consumers can ease budget pressures by paying down high-interest debt, negotiating better loan terms and taking advantage of higher yields on savings.
—Jessica Dickler
With more bad inflation numbers looming, the Fed will need to explain itself
The Fed’s big problem today is explaining why it’s holding rates steady when the inflation rate has worsened since its last meeting – and several indicators suggest more bad numbers to come.
Start with tomorrow’s PCE price index, the Fed’s preferred inflation indicator. Both Wall Street and the Fed are able to use the CPI and PPI to pretty much peg the change in the PCE. The headline is expected to rise 0.5% for September, which will boost the year-over-year rate to 3.7% from 3.4%. The Fed could look past that, assuming it’s driven by the continued rise in energy prices. But the core rate is seen rising 0.3%, raising the annual rate by a tenth to 3.1%.
What about the much-touted three-month annualized rate, which many doves have promoted as showing that inflation is under control? It fell to 2.05% last month, almost spot on with the Fed’s 2% target. Time to cut, right? Not so fast. Model in a 0.3% rise in the core and the 3-month annualized rate shoots up to 2.7%. The Cleveland Fed’s inflation nowcasting gauge sees core PCE in October running at 0.25%. Model that number in and the three-month annualized rate would rise to 3.24% in October. The takeaway: the gauge is so volatile that it serves as a poor guide for monetary policy.
The Cleveland Fed’s trimmed mean, which removes extreme price changes from the CPI, has hovered between 2.6% and 2.7% for most of this year, showing little change. The Dallas Fed’s trimmed mean has stood mostly alone in supporting a dovish take on inflation at 2.2%. It’s worth noting, however, the Dallas Fed President Lorie Logan has herself cautioned that the measure may do too extreme a job of trimming away inflation.
Another problem the Fed faces: a seasonal pattern of inflation spiking up at the beginning of the year. Goldman Sachs sees inflation easing next year as pressures from tariffs, the AI buildout and energy abate. But it worries, “companies could take the opportunity provided by start-of-the-year price increases to pass along their higher costs, resulting in a larger ‘January effect.’ “
The danger of a hold today amid current inflationary pressures is that the Fed may need to do more in coming months. TD Securities writes: “It only takes one notably bad inflation report and/or a collection of strong labor market data for the market to start pricing larger odds of a 50bp rate increase in upcoming meetings.”
—Steve Liesman
Stocks and Treasury yields both higher as markets brace for Fed decision
Markets were taking a cautious approach ahead of the Fed rate decision, with major indexes mostly positive and Treasury yields also higher.
The Dow Jones Industrial Average is up less than 100 points, while the S&P 500 and the Nasdaq were around the flatine.
In the fixed income market, the benchmark 10-year note added about 3.6 basis points to yield 5.03%, while the 2-year note added 3.7 basis points to 4.774%.
Since Kevin Warsh took over as Fed chairman in May, stocks have generally fallen on Fed meeting days, then posted gains the day after, according to DataTrek Research cofounder Nicholas Colas. The S&P 500 in particular has rallied at least 1% on the three post-meeting days of Warsh’s tenure.
—Jeff Cox
Latest data signals inflationary pressures are intensifying
A shopper looks for items in a grocery store on October 14, 2026 in Miami, Florida.
Joe Raedle | Getty Images
The Fed’s decision Wednesday follows a string of reports indicating that inflation is reaccelerating.
September’s consumer price index showed annual inflation ticked up to 3.7%, driven by higher energy costs. The CPI is currently on one of its longest streaks of annual readings above 2% on record.
The producer price index rose to 6.3% year over year in September. It was the steepest 12-month increase since 2022 for the index, which acts as a gauge of inflation on wholesalers.
The Fed won’t get the latest from its preferred inflation reading, the personal consumption expenditures price index, until the September number is released Thursday morning. Wall Street economists use CPI and PPI use to estimate PCE, and they expect it to rise as well.
— Alex Harring
Fed has a ‘completely new reaction function,’ Miran says
The Federal Reserve is following a different reaction function as it sets monetary policy, according to Stephen Miran, a former chair of the Council of Economic Advisers and governor at the central bank.
“There’s a completely new reaction function in town,” Miran said Tuesday on CNBC’s “Squawk Box.”
That new reaction function is “leading them to forecast additional hikes,” said Miran, who’s now senior strategist at Hudson Bay Capital.
Fed meeting minutes from the September gathering showed officials anticipated another increase, but did not signal when. Fed funds futures traders are anticipating the central bank holds rates steady on Wednesday before raising them in December, according to CME’s FedWatch tool.
Miran said inflation expectations in financial markets have been “cool as a cucumber” about hitting the Fed’s inflation target. He said no one was willing to bet that the Fed was not committed to getting inflation to its 2% target.
— Alex Harring
Goldman expects Warsh may come up short on guidance
Goldman Sachs economists think Fed watchers may be disappointed if they expect any major revelations from Warsh. The firm thinks the Fed has decided to take an every-other-meeting approach to hiking, and Warsh, who disdains providing forward guidance on policy, isn’t likely to offer much new insight.
“We do not expect significant new information from the press conference,” Goldman economist David Mericle said in a note. “The seemingly strong support for hiking every other meeting means there is likely a high bar to deviate from that plan through the end of the year, which should limit the impact of Fed communication for now.”
Moreover, “even if the FOMC decides to change course in the future and wants to communicate this to markets, Warsh’s decision not to hint at the slower pace at his September press conference suggests he might prefer to again leave that to others,” Mericle added.
—Jeff Cox
Economist Michael Feroli has some questions for Fed chair
Warsh has some explaining to do when it comes to the difference between the Fed’s stance in September and October, according to Michael Feroli, chief U.S. economist at JPMorgan Chase.
The Federal Open Market Committee chose to raise its key interest rate by a quarter percentage point last month after its preferred inflation measure, the personal consumption expenditures price index, posted a 0.2% core increase for August.
With the measure on track to rise 0.3% in September, Feroli wonders why the Fed isn’t hiking again.
“Chair Warsh will have to explain why the committee hiked after a two-tenths core PCE print in September but is now holding after an expected three-tenths outturn. Disallowing follow-up questions won’t resolve the challenge,” he said in a note. “A decision to leave rates unchanged less than a week before the midterm elections that goes unexplained would only encourage thoughts that policy is being driven by considerations other than employment and inflation.”
—Jeff Cox
