The Federal Open Market Committee voted 10 to 2 on 28 October to hold the federal funds rate at a target range of 3.75% to 4.00%, the Federal Reserve said in its statement. Two of the Committee's members, Lisa Cook and Beth Hammack, dissented, preferring to raise the range by a quarter point, according to the Fed.
In its statement the Fed described economic activity as expanding at a strong pace, pointing to resilient domestic spending, strong productivity growth and large capital investment. It said job gains have kept pace with the workforce and that inflation remains elevated, adding that further data would help determine the policy stance needed to return inflation to its 2% goal.
The trend
The decision leaves the target range exactly where it stood at the previous reading, on 29 October, and where it stood a year earlier: 3.75% to 4.00% in both cases. The range has not moved in twelve months.
Inflation has drifted further from the Fed's target over that period. The Consumer Price Index rose 3.7% year-on-year in September, up from 3.4% in August and from 3.0% a year earlier, Bureau of Labor Statistics data via FRED show. The Fed's preferred gauge, core personal consumption expenditures inflation, rose 3.1% in September, up from 3.0% in August and 2.8% a year earlier, according to Bureau of Economic Analysis data via FRED.
The labour market has loosened only slightly. Unemployment was 4.2% in September, up from 4.1% in August, though still below the 4.4% recorded a year earlier. Taken together, the data show inflation running above target while the jobs market has not weakened enough to force the Committee's hand either way, consistent with a hold rather than a move in either direction.
Rates
Treasury yields eased in the two days around the meeting. The 2-year yield, which tracks near-term rate expectations most closely, fell to 4.6% on 29 October from 4.7% the day before, but remains well above the 3.6% level of a year ago. The average 30-year fixed mortgage rate eased to 7.2% from 7.3% a week earlier, Freddie Mac data via FRED show, but it remains well above the 6.2% rate recorded a year ago.
What it means for our coverage
A company's modelled value is more sensitive to a change in the discount rate when a larger share of its expected cash flow sits further in the future, or when its debt is large relative to the value of those cash flows. For battery maker Ultralife (ULBI), a one-point rise in the discount rate would push our model's value down by 438.8%, swinging it into negative territory. For agribusiness group Andersons (ANDE), the same one-point rise would push modelled value down by 187.7%, also turning it negative, and for hotel owner Park Hotels & Resorts (PK) down by 147.7%.
These figures describe what happens to each company's modelled value if the discount rate used in our cash flow model rises by one percentage point; they are not a forecast that the Fed will move rates by that amount, and they are not a comparison with any share price. Full detail on Ultralife's financial model, including the assumptions behind its cash flow profile, is available on its company page.
The scale of the differences between the three companies illustrates the mechanism rather than predicting it: a business whose debt is large relative to its cash-generating value, or whose cash flows are weighted toward distant years, shows a larger swing in modelled value for the same one-point change in the discount rate than a business with less leverage or nearer-term cash generation.
What's next
The FOMC's next scheduled decision is 9 December 2026, when it will also publish updated economic projections, the Federal Reserve's calendar shows. A further meeting follows on 27 January 2027. Both are scheduled for 2:00pm ET.