Federal Reserve leaves interest rates unchanged despite rising inflation
Federal Reserve chairman Kevin Warsh will hold a press conference following the meeting of the bank's Federal Open Market Committee.Al Drago / Bloomberg via GettyShareAdd NBC News to GoogleOct. 28, 2026, 2:01 PM EDT / Updated Oct. 28, 2026, 2:06 PM EDTBy Steve Kopack, Maya Huter and Brian CheungThe Federal Reserve on Wednesday voted to keep interest rates unchanged, its final monetary policy decision before the midterm elections.
The decision to hold rates steady came despite rising inflation that jumped from 3.4% in August to 3.7% in September.
A major driver of that inflation is the soaring cost of gas, diesel and crude oil. These higher prices have hit consumers hard and many economists say the spillover effect of rising gas prices has started to show up across the broader economy.
In its post-decision statement, the Fed acknowledged the problem that inflation is causing but said it needs more data before moving forward with a rate hike.
“Inflation remains elevated. The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2 percent goal,” it said.
The Fed’s preferred inflation gauge, PCE, will not be released until Thursday, but it is expected to touch 3.7%.
Wednesday’s vote was not unanimous, unlike September’s 12 to 0 vote to hike rates, the first time since 2023 that the central bank had raised its benchmark rate.
Two officials, governor Lisa Cook and Cleveland Fed president Beth Hammack dissented in favor of a rate hike. The dissent by Cook, whom President Donald Trump is attempting to fire, was her first ever.
An interest rate hike could have added slightly more pressure to already beleaguered consumers.
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The most recent NBC News poll found President Donald Trump’s approval rating at 27% for his handling of the cost of living and just 29% for his handling of the war with Iran.
Two-thirds of Americans said the soaring gas prices triggered by Trump’s Iran war were either a “very serious” or a “somewhat serious” problem. More than half of respondents said current economic conditions had caused them to change what kinds of groceries they buy.
The central bank also acknowledged the economic anxiety gripping much of the country.
“Economic activity is expanding at a strong pace,” said the rate-setting FOMC. “While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient.”
Wednesday’s announcement and the Fed’s acknowledgement that inflation remains well above its goal set the stage for a rate increase during December’s monetary policy meeting.
Steve KopackSteve Kopack is a senior reporter at NBC News covering business and the economy.
Maya HuterMaya Huter is a Producer at NBC News covering business and the economy.
Brian CheungBrian Cheung is a business and data correspondent for NBC News.
