Business · Markets · 1 hr ago
Fed Holds Rates Steady as Warsh Signals Fewer Policy Meetings
The US Federal Reserve kept its benchmark rate at 3.75% to 4% after its October meeting.
Chair Kevin Warsh said the Fed will hold fewer rate-setting meetings next year, though accounts differ on the planned number.
The Fed has held eight policy meetings a year, and Warsh has argued that fewer meetings would give officials more time to assess economic data.
Two policymakers preferred a quarter-point rate increase, while the other officials voted to leave rates unchanged.
Short-term Treasury yields and the dollar fell after Warsh's remarks, but long-term bond yields rose as concerns about inflation persisted.
Traders still saw a strong chance of a rate increase in December, with one market estimate putting it above 90%.
The next major focus is the Fed's December rate decision, as officials weigh elevated inflation and economic data.
The Federal Reserve held its benchmark interest rate at 3.75%-4% after its October meeting.
Two policymakers dissented, favoring a quarter-point increase.
Chairman Kevin Warsh said the Fed would reduce the number of rate-setting meetings, with seven planned for 2027 and six from 2028.
Markets continued to expect a rate increase in December, with futures-implied odds above 90% after the decision.
Treasury yields and the dollar moved in different directions as investors assessed the decision and Warsh’s comments about the meeting schedule.
- Who
- The US Federal Reserve and its Federal Open Market Committee. Chairman Kevin Warsh announced the meeting-schedule change.
- What
- The Fed held its benchmark rate at 3.75%-4%. It plans fewer rate-setting meetings, while two policymakers dissented in favor of a rate increase.
- When
- The decision was announced on October 28, 2026. The schedule changes are planned for 2027 and 2028.
- Where
- United States.
- Why
- The Fed said inflation remained elevated and economic activity was expanding at a strong pace. Warsh said fewer rate-setting meetings would allow more information and data to accumulate between them.
Market interpreters favoring the meeting change as dovish
Critics concerned about the Fed's commitment to fighting inflation
Market reaction
Market interpreters favoring the meeting change as dovish
Some investors interpreted the schedule change as dovish, and short-dated Treasury yields and the dollar fell after Warsh's remarks.
Critics concerned about the Fed's commitment to fighting inflation
Some market observers saw the rate hold and fewer decision meetings as signs that the Fed was not showing enough resolve against high inflation.
Policy outlook
Market interpreters favoring the meeting change as dovish
Traders continued to price in a high chance of a December rate increase.
Critics concerned about the Fed's commitment to fighting inflation
Critics emphasized that inflation remained elevated and questioned whether the Fed was doing enough to contain it.
Warsh first raised the idea of reducing the Fed's annual number of policy meetings from eight to six, according to meeting minutes.
Warsh met with South Korean officials and the Bank of Korea governor in Bangkok.
The FOMC held its rate-setting meeting.
The Fed held rates at 3.75%-4%, with two policymakers dissenting in favor of an increase.
Warsh announced plans for fewer rate-setting meetings, and markets reassessed the outlook.
- Benchmark rate
- 3.75%-4%
- Dissents
- 2 policymakers favored a quarter-point increase
- December rate-hike odds
- More than 90% after the rate decision, according to the articles
- Rate-setting meetings
- 7 in 2027; 6 from 2028
- Two-year Treasury yield
- Fell as much as 4 basis points to 4.7% after Warsh's remarks, according to Mint
6 sources
美 연준, 금리 동결…워시 의장 “한국 경제에 관심”
미지근한 동결, 회의 축소에 시장 “연준 의지 안 보여”…장기 국채 금리 상승
美联储宣布维持联邦基金利率不变
US Short-End Yields Fall After Warsh Signals Fewer Fed Meetings
For the first time since 1992, a Fed governor and president dissented together, as Kevin Warsh says the ‘monetary medicine’ is starting to work
Tassi Fed invariati al 3,75%-4%, Warsh spiega il motivo della pausa. E annuncia novità riunioni 2027-2028
What people are saying
I am much more interested in the Korean economy than you think.
We believe eight meetings per year is the right number for the FOMC.
The market started moving when he discussed the change in scheduling, interpreting the move as dovish.
We expect the Fed to resume rate hikes in December.