Business · Markets · 8 hrs ago
Fed holds interest rates, but oil and bond yields weigh on Indian stocks
The US Federal Reserve kept its key interest rate at 3.75% to 4% on Wednesday, matching market expectations.
The rate had been raised to that level in September, and two committee members wanted another increase of 0.25 percentage points.
The Fed said inflation remains elevated even as economic activity grows strongly, and it will consider more information before deciding its next steps.
For Indian investors, the expected pause was already reflected in prices, so analysts expect little immediate effect on the Sensex and Nifty.
They say high crude oil prices are a bigger concern for India, while rising US bond yields and a weaker rupee also weigh on markets.
Analysts say the next direction for Indian stocks will depend on oil prices, foreign fund flows and company earnings, as well as geopolitical tensions.
The US Federal Reserve kept its federal funds rate target at 3.75% to 4% on 28 October.
The decision was approved by a 10–2 vote, with two officials favouring a rate increase.
The Fed said inflation remained elevated while economic activity was growing strongly.
Analysts said the decision was largely expected and that oil prices and rising US bond yields remained major concerns for Indian stocks.
The US 10-year Treasury yield rose to 5.046% from 4.993% in the previous session.
- Who
- The US Federal Reserve’s Federal Open Market Committee.
- What
- It kept its federal funds rate target at 3.75% to 4%.
- When
- Wednesday, 28 October 2026.
- Where
- The decision concerned US monetary policy; its potential market impact discussed in the articles was on Indian stocks.
- Why
- The Fed said inflation remained elevated and economic activity was growing strongly. The decision was in line with market expectations.
This story does not have two clearly opposing sides.
The Fed raised its federal funds rate target to 3.75% to 4%, its first rate hike since 2023.
The FOMC voted 10–2 to keep the target range at 3.75% to 4%.
US stock indices were up modestly, while the US 10-year bond yield had risen to 5.046% from 4.993% in the previous session.
- Federal funds rate target
- 3.75% to 4%
- FOMC vote
- 10–2
- Dissenting officials
- Lisa Cook and Beth Hammack
- Fed inflation goal
- 2%
- Brent crude price cited
- $115 per barrel
- US 10-year bond yield
- 5.046%, up from 4.993% in the previous session
What people are saying
Inflation remains elevated.
With Brent crude at $115 per barrel, it would be a much bigger pain for India than the impact of rising US bond yields
A pause is already discounted by the market and, therefore, is unlikely to have any impact.
A pause is a delay, not a change in direction, so the Fed’s data-dependent stance still matters.