# Fed holds rates at 3.75–4%; Warsh says price stability remains out of reach

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/investing/43150
Published: 2026-10-29T03:20:30.000Z
Updated: 2026-10-29T03:20:30.000Z
Section: Investing

> The Fed held rates at 3.75–4% as growth and employment remained strong. Warsh said policymakers needed more information to determine their next move, with price stability still unachieved.

The Federal Reserve held its benchmark interest rate at 3.75–4%, leaving its next policy decision dependent on further information as growth and employment remained strong and inflation stayed above target.

In an October 28 press conference carried by CNBC, Fed Chair Kevin Warsh said the Federal Open Market Committee would assess incoming information to determine the policy stance needed to return inflation to its 2% goal in a timely manner. “The committee will deliver price stability,” he said.

Warsh described an economy gaining momentum. First-half GDP growth was revised to 2.4% from 1.8%, and the third quarter appeared to have brought a faster expansion. Consumer spending was likely growing above 3%, while business investment was likely increasing at a double-digit pace, he said.

High-tech investment was leading the acceleration, with gains spreading to other categories, Warsh said. Capital spending accounted for a historically high share of GDP. The unemployment rate was below its level a year earlier and payroll growth was noticeably faster than last year, leaving employment conditions favorable under the Fed’s dual mandate.

Inflation, however, had exceeded the Fed’s objective for close to six years. Warsh said energy and related prices had risen again in recent weeks. The Fed’s task was to prevent those sector-specific price changes from spreading across the economy and to keep inflation expectations anchored.

Financial and credit conditions had tightened for some businesses and households following the September policy action, broadly as expected, Warsh said. Investors were becoming more selective in allocating capital. He nevertheless declined to characterize overall financial conditions as tight.

Asked why the committee had not raised rates immediately, Warsh said restoring price stability depended on a coherent strategy rather than a particular calendar date or an isolated data release. Over roughly five months as chair, he said, policymakers had reaffirmed responsibility for the 2% target, explained their policy framework and reduced accommodation in September. Inflation compensation measures, including swaps, and inflation expectations were moving in the desired direction, he said, while acknowledging that price stability had yet to be achieved.

Warsh also withheld judgment on whether the current rate was already appropriate. The overwhelming view among policymakers was that their approach had begun to work, but they had reached no firm conclusion. He said the coming period should provide greater clarity on the appropriate policy response.

The Fed also plans to reserve meetings for longer-term monetary policy strategy. It will retain eight FOMC meetings annually, with one meeting devoted exclusively to strategy starting next fall in 2027 and no rate vote or policy statement anticipated at that session. Warsh expects two strategy meetings and six policy-setting meetings in 2028. He said setting aside time for longer-term deliberation alongside regular assessments of economic conditions should improve policy decisions.