Fed Holds Rates Steady Signals December Hike

By Megan Brooks 29/10/2026 2 min read 22 views

The Federal Open Market Committee has decided to keep interest rates unchanged, leaving the Federal Funds rate at 3.75 to 4 percent. This decision was made amid stubbornly high inflation and imminent midterm elections. This was the FOMC’s penultimate meeting of the year, marking another instance where the committee chose to stay put on rates despite the persistent inflation backdrop.

The committee’s decision was split, with 10 members voting to pause and 2 members, including governors Lisa Cook and Beth Hammack, dissenting in favor of a 25-basis-point increase.

Federal Reserve Chairman Kevin Warsh discussed the current economic situation at the Oct. 28 press conference following the announcement, stating that inflation has been above the Fed’s target for six years. He emphasized that the FOMC’s recent discussions had centered on price stability. While he did not explicitly state what the Fed’s next move will be, Warsh hinted that another 25-basis-point increase could be possible in December if these trends do not show meaningful improvement.

Warsh also announced a change in the Fed’s meeting strategy, with one of the eight meetings next year focusing on broad monetary policy strategy without a vote on interest rates. Warsh called the shift an institutional choice designed to improve the nature and quality of the committee’s deliberations and ultimately the wisdom of its decisions.

Some experts warn that another rate hike could pose challenges for multifamily investors, but others note that an uptick in borrowing costs has already been factored in. James Godman, a partner at Herbert Smith Freehills Kramer law firm, said the decision gives the residential sector a few weeks of stability before the Fed meets again in December.

Danny Fishman, co-founder and CEO of GAIA Real Estate, predicted that another rate hike could add pressure to the multifamily sector, making it harder for owners to meet debt obligations and potentially pushing more properties into distress. The sector already faces raised borrowing costs and softer rental conditions, so an additional hike could tighten financing further.

Economists widely project the core Personal Consumption Expenditures index to rise by 0.3 percent month-over-month and by 3.1 percent year-over-year, the fastest rate since the start of the war in Iran. Ahead of the official data release, markets will watch to see if the core PCE aligns with the projected monthly increase.