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October 28, 2026 / 2:02 PM EDT / CBS News
The Federal Reserve held interest rates steady on Wednesday after hiking borrowing costs in September to clamp down on inflation.
The central bank left the federal funds rate at a target range of 3.75% to 4%, keeping it unchanged after raising rates last month for the first time in three years.
Investors and Wall Street analysts widely expected the Fed to remain on hold in October, but many economists think policymakers will again raise rates at their last meeting of the year in December.
Fed Chairman Kevin Warsh will discuss the decision at a press conference at 2:30 p.m. EDT. Since taking the reins as Fed chief from Jerome Powell in May, Warsh has emphasized the Fed's commitment to restoring price stability and vowed to bring inflation back down to its 2% target.
However, the Iran war has kept global energy costs elevated, making it harder to shake stubborn inflation. Last month, the closely watched Consumer Price Index rose at a 3.7% annual rate; core inflation, which strips out volatile food and energy prices, rose 2.6% from a year ago. Both measures were above economists' expectations.
Solid economic growth and steady consumer spending are also exerting upward pressure on prices, complicating the task of taming inflation, according to economists.
The Fed's benchmark rate is its main weapon for stabilizing consumer prices, which have crept up in recent months.
The latest rate decision comes less than a week before Americans head to the polls for the midterm elections, where affordability issues will be top of mind for voters. President Trump has long urged the central bank to ease borrowing costs.
What does this mean for your money?
The federal funds rate — what banks charge each other for overnight loans — influences the cost of borrowing across the U.S. economy. A rate hike can spur higher borrowing costs for bank loans, credit cards and auto loans, while boosting returns for savings accounts.
While the Fed held interest rates steady on Wednesday, consumers may yet face higher borrowing costs. Matt Schulz, a chief consumer finance analyst at LendingTree, said it's possible some loan rates could continue to climb heading into the holiday shopping season.
"Even though the Fed is leaving rates alone this month, it might raise rates again at their last meeting of the year in December," Schulz said in an email ahead of the Fed's decision. "That is far from guaranteed, but it is something that Americans should be aware of. It means that the debt they run up during the holidays could get a little more expensive to pay off before the year ends, through no fault of their own."
Edited by Alain Sherter
In:
Unpacking the most recent inflation data
(01:32)
Source: CBS News · Mary Cunningham
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