The Federal Reserve wraps up its October policy meeting on Wednesday, Oct. 28, 2026, and the big question is simple: will it raise interest rates again? The short answer is probably not this week. Most economists and traders expect the Fed to hold its benchmark rate at 3.75% to 4.00%, then raise it by a quarter point in December. Here is why, and what each outcome would mean for your credit card, mortgage and savings.
When is the Fed decision?
The Federal Open Market Committee (FOMC), the Fed’s rate-setting group, meets Oct. 27–28, according to the Fed’s meeting calendar. The policy statement comes out on the afternoon of Oct. 28 (the Fed typically publishes it at 2 p.m. ET), followed by a news conference with Fed Chair Kevin Warsh. The meeting after this one is scheduled for Dec. 8–9.
This is also the Fed’s last meeting before the Nov. 3 midterm elections, which is part of why it is getting so much attention.
Where rates stand right now
In September, the Fed voted unanimously to raise its target range by a quarter point to 3.75%–4.00%, its first increase in about three years, as USA Today reports. That move pushed the bank prime rate, which many credit cards and home equity lines are tied to, up to 7.00%.
The reason is inflation. The Bureau of Labor Statistics says consumer prices rose 3.7% in the 12 months through September, up from 3.4% in August. Gasoline alone jumped 9.1% in September and accounted for more than half of the monthly increase, while the energy index is up 20.4% over the year. (If you have felt that at the pump, our explainer on why gas prices are so high this October breaks down what is driving it.) “Core” inflation, which strips out food and energy, rose 2.6% over the year. All of these are above the Fed’s 2% target.
Will the Fed raise rates in October?
The case for a pause
Nearly everyone watching the Fed expects a hold this week:
- In a Reuters poll cited by USA Today, 94 of 100 economists expect the range to stay at 3.75%–4.00% in October, and all 100 expect an increase in December.
- Futures markets put the odds of an October pause at roughly 91%, according to Raisin’s pre-meeting preview.
- KPMG’s economists also expect a hold, saying the September hike “bought policymakers time” and that “October looks like a skip; December remains live.”
Rate changes take months to work through the economy, so waiting gives officials time to see how September’s hike is landing. The war with Iran is another big unknown, because any escalation or de-escalation could swing energy prices, and with them inflation.
The case for a hike
A surprise is not impossible. At the September meeting, 12 of the policymakers who submitted projections saw room for one more quarter-point hike this year, four saw room for two (or one half-point move), and only two saw no need for more, according to USA Today. And inflation has picked up since then.
Some officials have been blunt. Cleveland Fed President Beth Hammack warned on Oct. 12 that “with each passing month, persistently elevated inflation raises the risks of an inflationary mindset becoming entrenched in the economy.” Chair Warsh, speaking in Bangkok on Oct. 16, said it was “hard to be in a discussion with central bankers and not compare notes and hear the same thing about the surge in prices.”
So the debate is less about whether rates rise again and more about when: this week or in December.
What the Fed decision means for your money
Credit cards
Most credit cards have a variable rate equal to the prime rate plus a margin, so Fed moves flow almost straight through. According to BestMoney, banks charged an average 22.36% APR on accounts that paid interest in August (based on preliminary Fed data collected before the September hike), and APR changes usually show up within one or two billing cycles after prime moves.
In dollar terms, a single quarter-point increase is small: BestMoney estimates about $1.04 more a month on a $5,000 balance. The bigger cost is the balance itself, so paying it down does far more than any Fed decision will.
- If the Fed holds: no new Fed-driven APR increase this month.
- If it hikes: expect your variable APR to rise by about 0.25 percentage points within a cycle or two.
Mortgages
Fixed mortgage rates do not follow the Fed directly. They track longer-term bond yields, especially the 10-year Treasury, which was around 5.00% on Oct. 23. Freddie Mac’s weekly survey put the average 30-year fixed rate at 7.32% on Oct. 22, down slightly from 7.40% a week earlier, with the 15-year at 6.68%, per Fed Gazette’s weekly recap.
That means a “hold” this week will not automatically make mortgages cheaper. What matters more is how bond markets react to the Fed’s tone and to inflation news. Adjustable-rate mortgages and home equity lines of credit (HELOCs), on the other hand, are often tied to short-term rates and can rise after a hike.
Savings accounts and CDs
Savers are the one group benefiting. A study by YourBest of more than 2,200 deposit products found the median high-yield savings rate rose from 3.35% to 3.48% APY between Oct. 1 and Oct. 25, and the median 12-month CD climbed to 3.80%. Meanwhile, the FDIC’s national average for a regular savings account is just 0.38%, as the Wall Street Journal notes, with top high-yield offers reaching about 5%.
High-yield savings rates are variable, so they tend to rise after a hike. CDs lock in a fixed rate for a set term, which some savers like as protection against future cuts, though you give up access to the money. Which suits you depends on when you will need the cash.
Car loans and other borrowing
Auto loans and personal loans are usually fixed once you sign, so this week’s decision will not change an existing loan. New loans, though, are priced off current market rates, and a December hike could nudge them higher. The University of Michigan’s latest survey found that buying conditions for big-ticket items fell sharply this month because of higher interest rates and affordability worries, according to the Institute for Social Research.
Practical steps before and after the decision
- Check your card’s APR on your latest statement and make a plan to pay down high-interest balances first.
- Compare your savings rate with what high-yield accounts are paying; the gap with a basic account can be large.
- If you have a HELOC or adjustable-rate mortgage, find out when your rate resets and what index it follows.
- Do not rush a big purchase just to beat a Fed meeting; for mortgages, bond yields matter more than the Fed’s announcement.
- Budget for other rising costs too, such as health premiums. Open enrollment opens Nov. 1, and our guide to ACA open enrollment for 2027 covers what is changing. For a bigger-picture plan, see how to balance immediate needs and future financial goals.
This article is general information, not personal financial advice. Rates and forecasts can change quickly.
Other dates to watch this week
Several reports will shape the Fed’s December decision, according to Investlane and the Fed Gazette calendar:
- Tuesday, Oct. 27: Conference Board consumer confidence
- Thursday, Oct. 29: third-quarter GDP, personal income and spending, and weekly jobless claims
- Friday, Oct. 30: Employment Cost Index
FAQ
What time is the Fed announcement on Oct. 28?
The Fed typically releases its policy statement at 2 p.m. ET on the final day of the meeting, with the chair’s news conference about half an hour later.
Is the Fed expected to raise rates in October 2026?
No. Most economists and futures markets expect the Fed to hold at 3.75%–4.00% this week and raise rates by a quarter point at its Dec. 8–9 meeting.
Will mortgage rates go down if the Fed holds?
Not necessarily. Fixed mortgage rates follow longer-term Treasury yields, which react to inflation and economic news more than to a single Fed meeting.
Will my credit card rate go up?
Only if the Fed raises rates. If it does, most variable-rate cards would rise by about 0.25 percentage points within one or two billing cycles.
Is it a good time to open a high-yield savings account or CD?
Savings and CD yields have been rising this month. Whether a flexible savings account or a fixed-rate CD fits better depends on when you will need the money.
Featured image: Marriner S. Eccles Federal Reserve Board Building, Washington, D.C. Photo by the Federal Reserve via Wikimedia Commons (public domain).
