Fed Holds Rates at 3.75%–4% as Cook and Hammack Dissent for a Hike

The US Federal Reserve held its benchmark rate at 3.75%–4% on 28 October, while two officials dissented in favour of a hike. The Fed holds rates for now after a September increase.

The Federal Open Market Committee voted 10–2 in its statement released at 2 pm Eastern Time. Governor Lisa D. Cook and Cleveland Fed President Beth M. Hammack wanted the target range raised by a quarter percentage point.

It was Cook’s first dissent on a policy decision, Yahoo Finance reported, while Hammack had also dissented in July. Cook is a governor whom President Donald Trump is seeking to remove.

In its FOMC decision statement, the committee upgraded its assessment of the economy, saying activity was expanding at a strong pace, and said inflation “remains elevated”. It added that “the accumulation of more information” would help it set the policy stance, a line that markets read as keeping further hikes on the table.

Why the Fed holds rates despite inflation pressure

Inflation is running about one percentage point above the Fed’s 2% goal and has stayed above target for more than five years, according to reports. The central bank raised rates by a quarter point at its 15–16 September meeting.

Fed Chair Kevin Warsh argued at his press conference that the economy was not running too hot. “The economy is pointing in the right direction,” he said. He added that productivity gains could allow faster growth without much inflation, and that politics played no role in the decision.

Several market participants linked the pause to the 3 November midterm elections. Chris Zaccarelli, chief investment officer at Northlight Asset Management, said the Fed “probably would have raised rates today” without them. Tom Graff, chief investment officer at Facet, called the hold a mistake.

Others expect the pause to be brief. Karen Manna, fixed income strategist at Federated Hermes, said the hold deferred the debate rather than settling it. Kay Haigh of Goldman Sachs Asset Management said, “We expect the Fed to resume rate hikes in December.”

Treasury yields rise above 5% after the decision

Stocks rose modestly as Warsh spoke, with the S&P 500 and the Nasdaq Composite each up about 0.2%, and closed higher. The 10-year Treasury yield rose 5 basis points to 5.042%, while the 30-year yield climbed 6 basis points to 5.367%, according to Reuters data cited by AOL.

Shorter-dated yields moved the other way. The two-year yield fell 3.8 basis points to 4.70%, and the dollar index slipped 0.2%, as traders trimmed bets on near-term hikes.

Even though the Fed holds rates for now, futures pricing points to about an 80% chance of a hike at the 8–9 December meeting, with another increase likely by March, Yahoo Finance reported. Treasury Secretary Scott Bessent said the administration has faith Warsh will “find the right balance” between inflation and growth.

What it means for business leaders and India

For corporate borrowers, the pause offers little relief. Long-term borrowing costs remain high with the 10-year yield above 5%, and Warsh acknowledged that higher rates were already tightening credit conditions, which could slow business investment. Earlier this week, Wall Street stocks fell as the 10-year yield neared 5%.

The decision also matters beyond US shores. Higher US yields typically raise the bar for foreign portfolio investors weighing emerging-market assets, including Indian equities and bonds, and can put pressure on the rupee.

What happens next

The Commerce Department’s third-quarter GDP estimate is due on 29 October, and Warsh said he expects it to show strong investment and consumer spending. The midterm elections follow on 3 November, with inflation and the cost of living among the central campaign issues.

The next FOMC meeting is scheduled for 8–9 December, when markets expect the debate over a hike to return. The full policy statement is available on the Federal Reserve’s website. More coverage is available in our news section.

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Region: USA
Meta title (58 chars): Fed Holds Rates at 3.75%-4% as Two Officials Push for Hike
Meta description (154 chars): Fed holds rates at 3.75%-4% in a 10-2 vote as Lisa Cook and Beth Hammack push for a hike, while 10-year Treasury yields climb above 5% after the decision.
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Note: Phrasly humanisation not run (Phrasly required a human verification check; scheduled run unattended). Fact & grammar check done — 4 corrections. Flags: (1) Market moves (S&P 500, Nasdaq, yields, dollar) are intraday figures during Warsh’s press conference as reported by Reuters via AOL, not closing levels. (2) Raisin claimed “balance sheet runoff continues” — not used; Fed statement refers to maintaining ample reserves. (3) The India paragraph (US yields and FPI flows/rupee) is desk analysis, not sourced reporting. (4) Q3 GDP is due 29 Oct — update the article if the release is out before publishing. (5) Fed press-conference transcript PDF could not be loaded; Warsh remarks via Yahoo Finance.

Sources (fact-check):

• https://www.federalreserve.gov/newsevents/pressreleases/monetary20261028a.htm
• https://finance.yahoo.com/economy/policy/articles/fed-holds-rates-steady-awaits-180301828.html
• https://www.aol.com/articles/fomc-holds-rates-steady-markets-182926000.html
• https://thedailyrecord.com/2026/10/28/fed-holds-rates-steady-awaiting-inflation-data/