Fed holds rates steady, says it will cut policy-setting meetings in 2027

Sure, it might be spooky season, but not everything needs to be a trick or a treat.

That was the case with the October 28 Federal Open Market Committee meeting, in which the US central bank, in a widely anticipated move, kept rates unchanged: Fed officials voted 10–2 to hold rates steady.

The FOMC said it was maintaining benchmark rates in a range between 3.75% to 4%. Fed Governor Lisa Cook and Beth Hammack, Cleveland Fed president, were the two dissenters, advocating instead for a quarter-point hike.

“Inflation remains elevated,” the Fed’s post-meeting statement said. “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 two percent goal. The Committee will deliver price stability.”

While the move was expected, it invites speculation as to where monetary policy goes from here. Federal Reserve Chair Kevin Warsh, for his part, voiced confidence about the central bank’s actions thus far.

“If you were listening next to me in that room the last couple of days, the overwhelming consensus, the overwhelming judgment, is that what we’ve done in this monetary medicine [is] starting to work some, but there’s no firm conclusions,” he said.

“If we had a firm conclusion about the conduct of monetary policy, we’d announce it to much fanfare today,” Warsh continued. “What we decided to do was to call these questions, take stock of where we are, evaluate what we’re seeing out the window, ask ourselves whether the period right in front of us is likely to provide more clarity on the appropriate protocol.”

And while there were no major tricks or treats during the meeting itself, Warsh did unveil some major changes ahead in a news conference; he said the Fed will reduce the number of rate-setting meetings beginning in 2027.

“We believe eight meetings per year is the right number for the FOMC, but in 2027, one meeting will focus exclusively on broad monetary policy strategy, with neither a vote on the federal funds rate nor a policy statement anticipated,” he said. “The rest will be regular FOMC policy setting meetings, and I expect that in 2028 we’ll have two meetings dedicated [to] discussions of strategy and six for setting policy.”

Hey, you can’t get through a Fed meeting with zero surprises.