Fed holds rates in 10–2 vote; dollar slips as Warsh speaks

The US Federal Reserve kept the federal funds rate target range at 3.75%–4.00% at 18:00 GMT on Wednesday 28 October 2026, as markets had expected. The decision was not unanimous: the vote was 10–2, with Governor Lisa Cook and Cleveland Fed President Beth Hammack preferring a quarter-point hike.

The statement upgraded the Fed’s view of the economy, saying activity is expanding at a strong pace, and said inflation remains elevated. It added that more information will help the Committee set the policy stance needed to return inflation to its 2% goal in a timely way, and that the Committee will deliver price stability.

The decision itself barely moved markets. In the 30 minutes after 18:00 GMT, EUR/USD slipped 4 pips to 1.1137 and GBP/USD fell 1 pip to 1.3300, while USD/JPY rose 3 pips to 158.26. Gold futures fell 0.10% to 4049.40 and S&P 500 E-mini futures eased 0.04% to 7769.00.

The dollar weakened once Chair Kevin Warsh began his press conference at 18:30 GMT. Over the next 30 minutes EUR/USD rose 19 pips to 1.1156, GBP/USD gained 20 pips to 1.3320 and USD/JPY fell 21 pips to 158.05, with ranges of 40 to 50 pips. Gold futures ended 0.08% lower at 4046.10 after swinging between 4036.90 and 4081.20, and S&P 500 E-mini futures edged up 0.05% to 7772.50. Reuters reported the 2-year Treasury yield fell about 4 basis points.

Warsh has said he does not favour forward guidance, and the Fed announced it will cut back its meeting schedule from next year. With two officials already voting for a hike and inflation described as elevated, attention turns to whether the Fed raises rates in December.

Moves: last price before the release to the price 30 minutes later, from 1-minute data (Yahoo Finance); S&P 500 = E-mini futures, gold = COMEX futures. Sources: Federal Reserve, FOMC statement; Reuters via Yahoo Finance