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Fed Holds Rates at 3.75%–4% Amid Stronger Outlook

By Drooid · Oct 28, 2026 · How we work

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Summary

The Federal Reserve kept its benchmark interest rate unchanged at the 3.75%-4% target range.
The Federal Open Market Committee voted 10-2 to hold rates, with two members favoring a quarter-point hike.
Fed Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, supporting a rate increase.
The policy statement upgraded the economy outlook from “solid” to “strong”.
The statement noted that inflation remains elevated.

History

In August 1979, President Carter appointed Paul Volcker as Fed Chairman to confront 1970s inflation. Volcker’s “shock” raised the federal funds rate from an 11% average to a 20% peak in June 1981, pulling inflation from a 14.8% high in March 1980 down to below 3% by 1983. The September 16 2026 FOMC decision to hold rates at 3.75-4% echoes that disciplined tightening.

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In August 1979, President Carter appointed Paul Volcker as Fed Chairman to confront 1970s inflation. Volcker’s “shock” raised the federal funds rate from an 11% average to a 20% peak in June 1981, pulling inflation from a 14.8% high in March 1980 down to below 3% by 1983. The September 16 2026 FOMC decision to hold rates at 3.75-4% echoes that disciplined tightening.

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