US Fed Holds Rate Steady, Maintains Price Stability As A Top Priority
Updated 29 Oct 2026•3 min read
The FOMC voted with 10:2 majority to keep the federal funds rate unchanhged in a range of 3.75-4.00%. The decision was is in line with market expectations, however, 2 members dissenting from the decision shows that there is growing divide within the committee. The statement reiterated committee’s intent to deliver “price stability”.
Growth Holds Firm, Jobs Continue to Gain, While Inflation Remains Above Target
Overall growth remains resilient supported by productivity growth, strong capital investment (high-tech investment is leading the acceleration) and resilient domestic spending. Labour market conditions also remain resilient with no apparent signs of stress- about 68,000 average jobs added in CYTD 2026 (26,000 in CYTD 2025), while average unemployment rate remained stable at 4.2% in CYTD 2026 (4.2% in CYTD 2025).
On the other hand, inflation continues to run above the Fed’s target of 2.0%, with recent month’s CPI and PCE inflation at 3.7% and 3.4% respectively. Inflation is not projected to return to the 2% target until 2029, a year later than previously expected, as per the last dot plot published in September 2026.
Fed Chair Sees Current Financial Conditions Tighter, But Unwilling To Call Them Tight
The Fed Chair reiterated that the committee’s predominant focus remains on the inflation side of its dual mandate as growth and labour market conditions remain resilient. The Fed Chair said- “And while overall financial conditions are tighter, I’m unwilling and unable to call them tight.” Additionally starting 2027, while the total number of policy meetings will remain eight, one of the meetings would focus only on broad monetary policy strategy with no vote or policy statement. In 2028, there will be two policies without vote and policy statement.
Market Reaction
Muted market reaction as the US Fed decision was in line with market expectations. S&P 500 closed 0.28% higher, 10Y UST closed at 5.03% (+3 bps) and DXY closed at 102.15 (down ~0.16%).
Source: US Federal Reserve, Ionic Wealth
