The Federal Reserve meets October 27–28, and Wall Street expects it to do nothing. A hold would still matter to anyone with a mortgage, a credit card balance or a home search underway, because the Fed is in a rare spot: it is raising rates while hiring slows.
Where Things Stand
In September, the Fed raised its benchmark rate by a quarter percentage point to a target range of 3.75% to 4%, according to Scotsman Guide’s account of that meeting. It was the first hike in more than three years, J.P. Morgan Wealth Management noted. The vote was unanimous.
The reason is inflation. Consumer prices rose 3.7% in September from a year earlier, up from 3.4% in August, with gasoline doing much of the damage. Core inflation, which leaves out food and energy, was 2.6%. We covered the September numbers here.
Meanwhile the job market is cooling. Employers added just 29,000 jobs in September, far below the 80,000-plus economists expected, and the unemployment rate rose to 4.2% from 4.1%. Wage growth slowed to 3%, which is below the inflation rate. In other words, paychecks are losing ground while the Fed leans on the brakes.
What Markets Expect
Early-October futures pricing, as reported by Scotsman Guide from CME FedWatch data, put the odds of another quarter-point hike at the October meeting at roughly 17% to 20%, and the odds of a hike by December at about 84%. Those numbers move daily, so check the CME FedWatch tool for the latest.
J.P. Morgan Wealth Management’s base case is a hold this month, followed by roughly half a percentage point of additional hikes before the cycle ends, though it says the timing is uncertain. Minutes from the September meeting show most officials expected at least one more increase this year. Some described the hike as “insurance” against inflation staying high; others said current rates may be only mildly restrictive.
The Fed also has a new face at the top. Kevin Warsh became chair in May 2026, so this is among the first full tightening cycles under his leadership. Reporting also notes that the November midterm elections could make officials wary of moving right before voters go to the polls.
Why Your Mortgage Rate Has Not Waited for the Fed
Here is the part that surprises people: mortgage rates do not follow the Fed’s rate directly. They track longer-term bond yields, and those have been climbing on their own. The 10-year Treasury yield was about 5.1% on October 19, according to Mortgage Reports.
Freddie Mac’s weekly survey put the average 30-year fixed mortgage at 7.40% on October 15, unchanged from the week before and up from 6.27% a year ago. That is the highest since November 2023, according to one report. The 15-year average was 6.71%.
Do the math on a $400,000 loan. At 6.27%, principal and interest comes to about $2,468 a month. At 7.40%, it is about $2,770, or roughly $301 more every month, before taxes and insurance. That is our own calculation, and it matches a figure published by another outlet.
Forecasters have been expecting relief that has not shown up yet. Fannie Mae and the Mortgage Bankers Association each projected rates near 6.8% for the end of 2026, but those forecasts date from mid-September, before the latest climb. Freddie Mac’s survey also covers only borrowers with 20% down and excellent credit, so lenders may quote you something higher: Mortgage Reports’ lender averages on October 19 were about 7.47% for a conventional 30-year loan.
What to Do Before the Fed Speaks
- Savers: higher rates are good news. Check that your savings account or money market fund is actually paying a competitive yield, since many big banks lag.
- Borrowers with credit card debt: card rates follow the Fed closely, so a hold will not bring relief. Paying down the highest-rate balance first still beats waiting.
- Home shoppers: get quotes from at least three lenders and compare the APR, not just the rate. Ask what it costs to lock, and whether the lender offers a one-time rate reduction if rates fall.
- Adjustable-rate loans: the 5/1 ARM average ran near 6.9% on October 19, below fixed rates, but the savings can vanish if rates keep rising. Ask for the worst-case payment in writing.
- Small businesses: loans tied to the prime rate move with Fed hikes. If you carry a variable-rate line of credit, ask your lender how fast changes pass through.
The Catch
A hold is the consensus, not a certainty. The Fed will also publish a statement, and wording that hints at a December hike could push yields and mortgage rates up even if the benchmark rate stays put. The decision is due at the end of the meeting on October 28.
More on Contoh
- Inflation Jumps to 3.7% as Gas Prices Soar. What September’s Numbers Mean for Your Money
- Retail Sales Rose 0.8% in September, but Gas Did Most of the Work. What It Means for the Holidays
- Two U.S. Economists Win the Nobel for the Ideas Behind How the Fed Fights Recessions
Sources
- Scotsman Guide: Unexpectedly downbeat jobs report eases pressure on Fed to hike rates again in October
- Scotsman Guide: Fed policymakers saw multiple 2026 rate hikes as likely, September FOMC minutes show
- J.P. Morgan Wealth Management: Will the Federal Reserve hike rates at the October 2026 FOMC meeting?
- Federal Reserve: FOMC meeting calendar
- Freddie Mac: Mortgage Rates Hold Steady at 7.40%
- The Mortgage Reports: Mortgage rates today, October 19, 2026