As expected, the Fed held rates steady. But a dissent by Lisa Cook is sure to anger Trump.
Federal Reserve Issues FOMC Statement
Please consider the October 28, 2026 FOMC Statement.
The Committee decided to maintain the target range for the federal funds rate at 3-3/4 to 4 percent, in support of the Federal Reserve’s dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.
Economic activity is expanding at a strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.
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. The Committee will deliver price stability.
Voting against the monetary policy action were Lisa D. Cook and Beth M. Hammack, who preferred to raise the target range for the federal funds rate by 1/4 percentage point at this meeting.
The key phrase in the Fed statement is “Inflation remains elevated.” emphasis mine.
Trump is going to be more than a bit annoyed at Lisa Cook whom he seeks to fire and still does.
The Supreme Court denied his request as predicted in this corner. Trump has not commented yet on Cook, but I am sure it will be a hoot when he does.
Pause Now, December Hike
Within the past few weeks it was widely understood the Fed would pause this month. But at one point the odds surged well over 60 percent.
I did not believe that since it was too close to an election.
Despite the brief statements and lack of forward guidance, the Fed is indirectly giving forward guidance.
When the October rate hike odds surged, an endless parade of Fed speakers quickly knocked the idea wanting more data.
Forward guidance or not, the Fed will always find a way to do what it wants.
In that respect, hardly anything has changed with Warsh.
Here’s a link to the FOMC Press Conference. It rates to be interesting.
Related Posts
September 11, 2026: Hello Nay Sayers, the Fed Hikes Interest Rates in 5 Days, Odds 85 Percent
A rate hike is now a done deal, as expected in this corner.
October 14, 2026: CPI Hotter than Expected in September, Up 0.65 Percent
Another Fed Rate Hike Coming but Delayed
Last month I said “A rate hike in September is all but certain after this report.”
And so it was.
I also said there would not be a hike in October, but there should be. This report sealed the “should be” aspect.
However, the Fed went out of its way to issue forward guidance when a parade of Fed governors and presidents pushed back on an October rate hike, without mentioning the obvious reason.
I never expected a hike because the next meeting is October 28, just 6 days before the midterm elections.
October 15, 2026: Producer Prices Rise a Hot 1.3 Percent in September
This is the largest PPI advance since rising 1.7 percent in March 2022
October 18, 2026: Real Wages are Negative Year-Over-Year for Six Consecutive Months
Inflation is chewing up wage gains, and then some.
Tomorrow morning, we get a look at full year estimate of GDP for the past fiscal year. It is projected to be up 3.5% or roughly $1 trillion. Deficit has grown around $2 trillion over the same period. So again, in rough numbers, GDP is growing annually at 3.5% and the deficit north of 5%. Stated another way, our annual liabilities are growing exponentially faster than the income side which is a certain and accelerating path to destruction. We have a huge disconnect with excessive spending and mushrooming debt service costs that are going to be monetized one way or another, and the fed politically refused to raise rates to force the president and congress to implement realistic even if painful solutions. Mr. Market will ultimately be the adult that forces corrective action, probably at the last moment, therefore inflicting more pain on the country than necessary.
During this midterm campaign cycle, I have not a single politician is talking about this nor is any news media that I have seen or heard. The last politician to intelligibly raise the alarm was Congressman Ron Paul. A little food for thought; when was the last time you heard a politician described as a patriot? even in a eulogy?
What a mess
The FED is getting more and more political. With the PPI this hot the FED should have bumped rates up a half percent. Be ready for some screaming inflation in the first half of 2027….
They are running the economy hot and inflating away the debt. The Fed is the most pro-inflation, anti-consumer organization on the planet. When things go badly they drop rates to zero in the blink of an eye. But they torture themselves over a quarter point hike when inflation is raging.
Obviously the Fed policy is inflation as a substitute for growth.
The FED as currently constructed and operating is entirely analogous to Ptolemaic cosmology’s fantasy creation of “epicycles” to explain and deal with anomalous astral body movements.
Kepler’s insight that orbits are elliptical instead of perfect godly circles demolished Ptolemaic cosmology, and implementing a 50% Discount/Rebate policy at the various points of retail sale is a Keplerian equivalent in the economy and the money system.
wisdomicsblog.com
i was thinking the exact same thing.
promote your blog one one time and you are gone
It’s less the self promotion and more that not a single post from them makes sense. Maybe I’m just an idiot?
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he smells like arthur burns. he’s no tall paul volcker. pax dumbfuckistan empire is crumbling. follow the troop retreats and the inflation in your life and wondering hoards and tent cities of meth heads in many western and southern cities.
There is a spectrum with free at one end and secure at the other. To the degree something is free, as in a more random array of future paths possible and accessible, it is not secured, as in channeled, gated, modulated.
I was a kid in a secure Pax Americana. (White kid, middle class, public school, etc.) This was a product of the winnowing of outcomes into big standardized teams, through the New Deal, WW2. and Cold War. In theory this would segue into a globalized world with civil rights for all, the end of history scenario, globally harmonized, but limiting on individuals correspondingly correspondingly. Choices, a sort of menu, some rewards for initiative, but not radically so, for most people.
The further it veers toward the free end, or un-equalized, the more individual paths do actually diverge, with a Musk as one outcome (permutation) and a meth gutter collapse at the other.
I’m not lobbying for one or the other. I like an in between space that has some freedom and some security. Just riffing off what you wrote.
How many of us really believe Warsh when he claims their inflation target is not soft? I mean really. Hot CPI in Sep and they SOH now? Obviously this is going to be seen as political whichever way they go, so why not do what is right? Natural rate is well over 5% based on current inflation and GDP growth rate.