FOMC Interest Statement and Chairman Warsh’s Press Conference
October 28, 2026
The two-day FOMC statement ended with an as-expected decision to leave the federal funds target range unchanged at 3.75-4.00%.
Unlike the unanimous 12-0 vote at the previous policy review in mid-September, today’s 10-2 decision included dissenting votes from Governor Lisa Cook and Cleveland Fed District President Beth Hammack. Cook has been the target of President Trump’s persistent removal effort. Hammack, one of four rotating district presidents with voting privileges during 2026, joined the Board of Governors in August 2024.
All that today’s statement indicates regarding why rates were not changes is included in a sentence that reads, “the accumulation of more information will help the committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee’s 2% goal.”
The brief comments about economic activity, labor market, and inflation are identical to those in the September 16 press statement.
At the press conference, Chairman Warsh depicted a resilient U.S. economy, with growth on a strengthening trend but not necessarily one that is overheating. The labor market is hovering near full employment. Inflation is too high, but he believes that by doubling down on the pledge to restore a full deceleration to the 2.0% target, measured by the PCE price deflator, inflation expectations are starting to show more confidence in that getting done. Signs of near-term expected inflation are as high if not higher, but measures of where inflation is headed longer term have shown some welcome movement. Asked if financial markets over the past six weeks had behaved as Fed officials were expecting and hoping following the initial rate hike in September, he answered that they had more or less.
On the matter of not raising rates a second time today, he flat-out rejected that the U.S. political calendar had any influence and said the the period between now and the December meeting will be information-rich and that the knowledge so gained will help Fed officials not just plot out another data point in the process of making policy less accommodative but instruct them better strategy-wise on how best to restore inflation at 2.0% and to align expected inflation over multiple time distances to align with that goal.
None of the above discussion diverted from what one would expect Warsh to have said. One surprise of a different nature was the announcement that in 2027 while there will still be eight scheduled FOMC meetings, only 7 of those will be policy-setting events. The other meeting will be devoted to strategic questions to better understand the relationship between monetary policy and the economy’s performance. In 2028, the ratio will shift to six policy-setting affairs versus two meetings devoted to strategic issues. Policy statements will not be released after the strategy-oriented meeting.
Finally, Warsh praised the seriousness and intellectual curiosity of his FOMC colleagues, expressed the view that a lot of progress had been made in the five months since he became Fed Chairman, and indicated that while there is 100% agreement with and commitment to a 2.0% inflation target that won’t settle for treating such as a soft goal, there are different views over timing and tactical questions that elicited deep discussions in the latest meeting. He didn’t mention the two dissenting votes for a 25-basis point rate hike now, nor the reasons behind the dissents cast by Hammack and Cook. The press conference again lasted a half hour only, which is shorter than allotted to such events with previous Fed Chairs. During that span, the 10-year Treasury yield rose two basis points, net movement in U.S. equities was minimal, the price of West Texas Intermediate oil dipped a mere 0.2%, and the dollar edged 0.3% higher against the euro, while edging down 0.2% relative to the yen.
Copyright 2026, Larry Greenberg. All rights reserved.
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