US Federal Reserve Holds Rates Steady, but Two Members Wanted a Hike
America's central bank has paused. The Federal Reserve kept its main interest rate at 3.75% to 4%, but two of its twelve voting members wanted to raise it again.
What happened?
On 28 October 2026 the Federal Open Market Committee voted 10 to 2 to leave the federal funds target range unchanged. The two who disagreed, Lisa D. Cook and Beth M. Hammack, preferred a quarter-point increase. The Fed had raised the range by a quarter point at its September meeting, when the vote was 12 to 0. The rate paid on reserve balances stays at 3.90%.
Why is it important?
The US interest rate influences borrowing costs, currencies and investment flows across the world, including in India. The Fed's own statement says the economy is expanding strongly while inflation is still elevated, which keeps the question of further hikes open.
How will it affect businesses and ordinary people?
Higher US rates can make the dollar stronger and make it more costly for companies in other countries to borrow in dollars. Importers and firms with dollar loans should watch the next decision closely.
What opportunities does it create?
Businesses that earn in dollars, such as IT and services exporters, may benefit from a stronger dollar, while those that import in dollars may need to plan their costs carefully. The next Fed meeting is in December.
Important facts and figures
- Federal funds target range: 3.75% to 4%
- Vote on 28 October 2026: 10 in favour, 2 against (both wanted a hike)
- September 2026: range raised by 0.25 percentage point in a 12 to 0 vote
- Rate paid on reserve balances: 3.90%