The Fed Held Rates and Two Dissenters Wanted to Raise Them, Because Apparently the Problem Is That Things Are Too Affordable
Byline: Dakota Jones
Desk: Economic, Business & Financial, Macroeconomics
[OPENING]
The Federal Reserve held interest rates steady Wednesday. Two members of its policy committee wanted to raise them instead.
That is the headline. The detail is that inflation remains above the Fed’s target, economic activity has strengthened, and the committee is waiting for more information before deciding what to do next. In other words: rates did not move today, but the argument over what should happen next is very much alive.
The Federal Open Market Committee, or FOMC, voted 10–2 to keep the federal funds target range at 3¾ to 4 percent. That is the rate range the Fed uses as a key part of monetary policy. It is not a promise that borrowing costs for every household or business will move in lockstep. It is the committee’s central policy setting, and today, it stayed where it was.
[GRAPHIC, DECISION AT A GLANCE]
- Decision: Hold rates steady
- Vote: 10–2
- Target range: 3¾ to 4 percent
- Dissenters: Lisa D. Cook and Beth M. Hammack
- Preferred action from both dissenters: Raise rates by a quarter point
[END GRAPHIC]
Here is the part that makes the decision more than a routine pause: both dissenters wanted a quarter-point hike. That is a 0.25 percentage-point increase. They were not asking for a cut, a hold, or another round of “let’s see what the next data says.” They wanted the Fed to tighten policy further.
The majority chose to wait.
What you’ll learn in this guide: what the Fed decided, why the two dissents matter, what the available economic indicators say, and why a December rate hike is back in the conversation.
The Fed’s message: inflation is still the problem
Chairman Kevin Warsh said inflation “remains elevated” and that the committee needs “the accumulation of more information” before deciding on policy. He also said the committee “will deliver price stability.”
That language is careful. It does not announce a future hike. It does not rule one out. It says the Fed is watching the evidence and has not decided that it has enough to act again.
The Fed’s inflation goal is 2 percent. Inflation has been above that target for more than five years, and price increases have picked up since the September meeting. The Fed’s preferred inflation gauge is expected to be above 3 percent for September even excluding food and energy. That exclusion matters because food and energy prices can move around sharply; the figure gives policymakers another way to assess price pressures without those categories.
The uncomfortable point is straightforward: the Fed held rates, but inflation has not settled down to the level it wants. “Wait for more information” is a description of the committee’s approach. It is not a declaration that the problem has been solved.
And no, the two dissenters were not arguing that prices were rising too slowly. They wanted a hike while the rest of the committee chose to hold. Apparently, for two voters, the case for more restraint was stronger than the case for patience.
A hold today does not erase September’s hike
There is an important bit of context here: the Fed’s September meeting raised rates by a quarter point. Today’s decision was a hold after that increase. It was not a rate cut, and it did not reverse the September move.
That distinction matters when reading the current range. The target remains 3¾ to 4 percent after the September hike. The decision Wednesday was whether to increase it again now. The majority said no. Cook and Hammack said yes.
The Fed also changed its description of economic activity. In September, the statement called activity “solid.” This time, it said activity was “expanding at a strong pace.”
That is an upgrade in the wording, and it sits beside the committee’s warning that inflation remains elevated. The picture is not “the economy is weak, so rates must come down,” nor is it “inflation is fixed, so the Fed can relax.” The statement presents stronger activity and persistent inflation at the same time. Those conditions leave the committee weighing competing signals rather than following an obvious script.
The Atlanta Fed’s GDPNow tracker points to 3.4 percent annualized growth in the third quarter, which would be the strongest in a year. GDPNow is a running estimate of economic growth, not the Fed’s rate decision and not a promise about what the final growth figure will be. Still, it is one more indicator pointing toward an economy with momentum.
A stronger growth estimate does not, by itself, dictate a hike. Nor does a high inflation reading automatically dictate one on a particular day. The committee says it needs more information. The two dissenters’ votes show that not everyone thinks waiting is the right choice.
Two dissenters, and a first for Lisa Cook
Governor Lisa D. Cook and Cleveland Fed President Beth M. Hammack both preferred a quarter-point increase. Cook’s vote was her first dissent since joining the Fed in 2022.
Her dissent comes amid a continuing controversy. President Trump has tried to remove Cook from office over allegations concerning home loan applications. The Supreme Court stopped those attempts, and the administration has restarted the move. A hearing is scheduled for early November.
Those circumstances are part of the public context around Cook’s role. They do not change what her vote was: she preferred a rate hike at this meeting. The record should remain clear on both points. Her policy position and the continuing dispute over her position at the Fed.
Hammack also preferred a hike. The two votes were the only dissents from the 10–2 decision to hold.
[GRAPHIC: THE VOTE]
| FOMC position | Voters |
|---|---|
| Hold the target range at 3¾ to 4 percent | 10 |
| Raise the target range by a quarter point | 2 |
Dissenting voters: Lisa D. Cook and Beth M. Hammack
[END GRAPHIC]
A dissent does not change the decision. The majority set the policy. But dissent makes visible that policymakers do not all read the same inflation and growth picture in the same way. Today’s split says: the committee agreed on the outcome, not on whether that outcome was cautious enough.
Markets rose. The next meeting is already in view.
Markets closed higher after the decision.
[GRAPHIC, MARKET CLOSES]
| Index | Daily change | Closing level |
|---|---|---|
| Dow | +97.53 points (+0.19%) | 52,475.10 |
| S&P 500 | +21.38 points (+0.28%) | 7,743.98 |
| Nasdaq Composite | +72.04 points (+0.27%) | 26,549.85 |
[END GRAPHIC]
Those gains tell you how the indexes finished the day. They do not settle the rate question. Futures pricing indicates a strong possibility of another hike at the December FOMC meeting. That is a market expectation, not a commitment by the Fed.
The distinction is worth keeping in view. The committee did not announce a December increase. Warsh did not promise one. The Fed said it needs more information. Markets are pricing in a meaningful possibility that the next move could be higher.
So the next meeting is not a footnote. It is the next decision point in a debate that is already underway.
The election is in the background; the Fed says policy is about the data
The midterm elections are scheduled for November 3, just days after this decision. Some observers have speculated that officials would not want to raise rates so close to an election.
That is speculation about the timing, not an explanation established by the Fed. The committee’s public statement points to elevated inflation and the need to gather more information. It also describes economic activity as expanding at a strong pace.
The practical takeaway is to separate what is confirmed from what is being inferred. The Fed held rates. Two members wanted a hike. The election is near. Some observers have connected the timing to the decision. But the available facts do not establish that the election caused the hold.
There is no need to pretend the calendar is invisible. There is also no reason to turn a theory about the calendar into a proven motive. Those are different things. A good read of the decision keeps them different.
Warsh is changing how the Fed uses its meetings
Warsh also announced changes to the FOMC’s meeting schedule and focus.
In 2027, one meeting will be devoted exclusively to broad monetary policy strategy. There will be no rate vote or policy statement anticipated at that meeting. Warsh said he believes eight meetings per year is the right number for the FOMC.
For 2028, he said the plan is for two meetings dedicated to strategy and six for policy.
That is a change in how the committee organizes its work. It does not alter today’s rate decision, and the announced strategy meetings are not additional rate hikes or cuts. One meeting, in 2027, will focus on the broader framework rather than a rate vote or statement. In 2028, the split described by Warsh is two strategy meetings and six policy meetings.
The schedule matters because it tells you how the Fed intends to structure its deliberations. It does not tell you in advance where rates will go. The next rate decision still depends on what the committee decides when it meets to set policy, and, as Warsh put it, on the information available to it.
What this means for you: watch the next decision, not just today’s headline
If you are following the economy, the most useful summary is not simply “the Fed held.” It is this: the Fed held, two members wanted a hike, inflation remains elevated, economic activity was upgraded in the statement, and markets see a strong possibility of another increase in December.
That does not tell you exactly what the Fed will do next. It does tell you what to track:
- Inflation: The Fed says it remains elevated, and its preferred gauge is expected to be above 3 percent for September even excluding food and energy.
- Economic activity: The statement moved from “solid” to “expanding at a strong pace.” GDPNow points to 3.4 percent annualized Q3 growth.
- The policy split: Cook and Hammack both wanted a quarter-point hike. Their votes show that a higher rate was a live option inside the committee.
- December expectations: Futures pricing indicates a strong possibility of another hike, but that is not a Fed promise.
- The next information: Warsh said the committee needs more information before deciding policy.
A hold can be a pause in action without being a conclusion. That is where the Fed is now: no rate move today, but no all-clear on inflation either.
FAQ
Did the Fed cut interest rates on October 28?
No. The FOMC held the target range at 3¾ to 4 percent.
Who dissented, and what did they want?
Governor Lisa D. Cook and Cleveland Fed President Beth M. Hammack dissented. Both preferred a quarter-point rate hike.
Was this the Fed’s first rate increase in a while?
No. The September meeting had already raised rates by a quarter point. The October 28 decision kept the range unchanged.
Does the December meeting guarantee another hike?
No. Futures pricing indicates a strong possibility of a hike, but the Fed has not committed to one. Warsh said the committee needs more information before deciding policy.
Why does the Fed care about inflation above 2 percent?
The Fed’s stated inflation goal is 2 percent. Inflation has remained above it for more than five years, and the committee says inflation remains elevated.
What is changing about FOMC meetings?
In 2027, one meeting is planned to focus exclusively on broad monetary policy strategy, with no rate vote or policy statement anticipated. Warsh said he believes eight meetings per year is the right number. In 2028, he described two strategy meetings and six policy meetings.
Final Thoughts
The Fed did not raise rates on Wednesday. Two members wanted it to. That is a clean summary of the vote, and a less clean summary of what comes next.
Inflation remains above the Fed’s target. The committee’s statement described activity as expanding at a strong pace. Markets are pricing in a strong possibility of a December hike. None of those facts guarantees the next decision, but together they explain why the debate is not over.
For you, the prudent approach is to keep the decision and the forecasts separate. Today’s rate is unchanged. A December hike is possible, not promised. The next move will depend on the information the committee says it is waiting to gather.
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