Interest Rate Announcement: Fed Holds Rate in October

The Federal Reserve held the federal funds rate at 3.75% to 4% after its October 27-28, 2026 meeting. This is the seventh rate announcement of 2026. The rate was unchanged in January, March, April, June and July, then rose by a quarter percentage point in September. The decision came after the Federal Open Market Committee’s October meeting. The federal funds rate is not a mortgage rate, and mortgage rates do not automatically move with it.

According to the Federal Reserve’s press release, the FOMC approved the statement by a 10-2 vote and decided to maintain the target range at 3.75% to 4%. Lisa D. Cook and Beth M. Hammack dissented, each preferring to raise the range by another quarter percentage point. September’s decision was unanimous at 12-0.

The FOMC statement described economic activity as expanding at a strong pace and said domestic spending has held up, even with high uncertainty tied in part to geopolitical developments. It described productivity growth as strong and capital investment as robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little. On prices, the statement said “inflation remains elevated” and that more information will help the committee determine the policy stance needed for a timely return to its 2 percent goal.

The committee also stated that it is continuing its policy of maintaining ample reserves in the banking system. This was Chair Kevin Warsh’s fourth FOMC meeting as chairman, following Jerome Powell’s departure in May.

What Changed in the October FOMC Statement?

The October statement keeps the short format the committee has used since June. Three changes from September stand out.

Growth Described as Strong

September’s statement said economic activity was expanding at a solid pace. October’s says it is expanding at a strong pace. The language on jobs, unemployment, productivity and capital investment is largely the same.

A Pause to Gather More Information

In September, the committee said its rate increase would support a timelier return to the 2 percent inflation goal. That sentence is gone. In its place, the October statement says the accumulation of more information will help the committee determine the appropriate policy stance. Both statements close with the same line: the committee will deliver price stability.

Two Dissents in Favor of a Hike

September’s vote was unanimous. In October, two members voted against holding the rate, and both preferred an increase. Hammack has now dissented in favor of a higher rate at two of the last three meetings. In July, she, Neel Kashkari and Lorie K. Logan voted for a quarter-point increase while the majority held the rate.

Administered Rates Unchanged

The Fed’s implementation note kept the interest rate paid on reserve balances at 3.90%, effective October 29, 2026. The primary credit rate, which applies to short-term loans banks take from the Fed, stayed at 4%.

What the Federal Funds Rate Does and Does Not Control

The federal funds rate is the target range the FOMC sets for the rate depository institutions charge one another for overnight loans. It influences short-term borrowing costs across the economy, including credit cards, auto loans and home equity lines of credit, which are commonly tied to the prime rate.

Long-term mortgage rates work differently. The 30-year fixed mortgage rate tracks the 10-year Treasury yield more closely than it tracks the federal funds rate. Treasury yields respond to bond market demand, inflation expectations and investor appetite for risk. A Fed rate change is one input among several rather than a direct lever on what a buyer is quoted.

Where Mortgage Rates Stand After the Decision

Freddie Mac’s Primary Mortgage Market Survey showed the 30-year fixed-rate mortgage averaging 7.32% as of October 22, 2026, down from 7.40% the week before. A year earlier, the average was 6.19%. The 15-year fixed-rate mortgage averaged 6.68%.

The 30-year average climbed for several weeks around the September decision. It was 6.95% on September 17, the day after the Fed’s increase. It passed 7% on September 24 for the first time since January 2025, then reached 7.40% in the October 8 and October 15 surveys. The October 22 reading was the first weekly decline in that stretch. Freddie Mac publishes the survey every Thursday.

Federal Reserve Rate Decisions in 2026

The FOMC has met seven times in 2026. The rate held steady at five of the first six meetings before the September increase, and votes have ranged from unanimous to four dissents.

How a Fed Rate Change Reaches Variable-Rate Debt

Home equity lines of credit and most credit cards carry variable rates tied to the prime rate. Banks commonly set prime 3 percentage points above the top of the federal funds target range, so a Fed move tends to show up on these accounts after the next rate adjustment in the loan terms.

The math is straightforward. Each quarter point on a $50,000 HELOC balance changes yearly interest by $125, or about $10.42 a month. The calculator below runs the same math on any balance.

Fixed-rate mortgages do not change once the loan closes. Adjustable-rate mortgages reset on their own schedule, based on the index and margin in the loan documents.

What the Benchmark Rate Means for Homebuyers and Homeowners

Lenders set mortgage interest rates based on credit risk, loan type and market conditions. Beyond the 10-year Treasury yield, the rate a borrower is offered depends on personal factors, including debt-to-income ratio and credit score. Comparing quotes from several lenders on the same day shows how those factors play out for a specific loan.

The Home Buyer’s Hub covers each step from preapproval to closing. A local agent can put current rates in context for a specific market and price range. Connect with a REMAX agent to start the search.

The Federal Reserve’s 2026 Interest Rate Announcement Schedule

The Federal Open Market Committee (FOMC) meets eight times a year and announces its decision on what to do with the benchmark interest rate. The schedule for 2026 is as follows:

• January 27-28
• March 17-18
• April 28-29
• June 16-17
• July 28-29
• September 15-16
• October 27-28
• December 8-9

For ongoing coverage, see our market updates.

Read the full October 28 FOMC statement below:

The Federal Open Market Committee approved the following statement for release by a 10-2 vote:

The Committee decided to maintain the target range for the federal funds rate at 3-3/4 to 4 percent, in support of the Federal Reserve’s dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.

Economic activity is expanding at a strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.

Inflation remains elevated. 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.

Voting against the monetary policy action were Lisa D. Cook and Beth M. Hammack, who preferred to raise the target range for the federal funds rate by 1/4 percentage point at this meeting.