Policy rate held at 3.75–4 percent as two voters seek increase
The Federal Reserve held its federal funds target range at 3.75–4 percent in a 10–2 vote. Lisa D. Cook and Beth M. Hammack dissented, preferring a 25 basis point increase, while the central bank continued its ample-reserves policy.
Ample reserves anchor implementation
The Board of Governors unanimously kept interest on reserve balances at 3.90 percent, effective October 29, 2026, and primary credit at 4.0 percent.
The Federal Open Market Committee (FOMC) directed the Federal Reserve Bank of New York's Desk to maintain the target range through open market operations.
Standing overnight repo and reverse repo rates are 4.0 and 3.75 percent; reverse repos have a $160 billion daily counterparty cap.
From October 29, the Desk may buy Treasury bills and, if needed, Treasuries maturing within 3 years to maintain ample reserves.
It will roll over all Treasury principal at auction and reinvest all agency principal in Treasury bills.
Transactions run through the System Open Market Account until instructed otherwise.
Strong activity meets elevated inflation
The FOMC described economic activity as expanding at a strong pace, with resilient domestic spending despite elevated uncertainty partly attributable to geopolitical developments.
Productivity growth is strong and capital investment robust.
Job gains have kept pace with the workforce, while unemployment has changed little.
Inflation remains elevated.
The Committee said additional information will help determine the policy stance needed for a timely return to its 2 percent inflation goal.
A hold with dissent
The unchanged range preserves the current policy setting rather than resolving the disagreement over inflation.
Both dissenters favored tighter policy.
The FOMC tied its assessment of the appropriate stance to further information and reiterated its commitment to price stability.
Source: Federal Reserve issues FOMC statement
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