The Fed Held at 3.75%–4% With Two Votes to Hike. What a December Move Would Cost Your Credit Line
The Fed held rates at 3.75%–4% on Oct. 28, 10–2, with two members wanting a hike. What it means for variable-rate loans and cash planning.
The Federal Reserve left its target range at 3.75% to 4% on October 28, 2026, but not unanimously. Two members, Lisa Cook and Beth Hammack, voted to raise it by a quarter point. For owners with variable-rate debt, the hold is a pause, and the dissents are a warning that the pause may not last.
The Fed held the federal funds target range at 3.75%–4% on October 28 by a 10–2 vote. Both dissenters wanted a 0.25-point increase. The statement describes economic activity as expanding at a strong pace and inflation as elevated, so owners with prime-based loans should plan for a possible increase at the next meeting.
What happened
The Federal Open Market Committee decided to maintain the target range at 3-3/4 to 4 percent, the level it set when it raised rates by a quarter point on September 16. That September move was the first increase since 2023, which we covered in Fed Hikes Rates to 3.75%–4%.
The October statement was approved 10–2. Cook and Hammack both said they preferred to raise the range by 1/4 percentage point at this meeting.
The Fed’s assessment, in its own words:
Topic
What the statement says
Activity
Expanding at a strong pace; spending resilient
Jobs
Job gains have kept pace with the workforce; unemployment little changed
Inflation
Remains elevated
Balance sheet
Continuing to maintain ample reserves
Market-calendar reports put the next decision on December 9. The Fed’s statement page itself does not list the date, so confirm it on the Fed’s meeting calendar.
Why it matters
A 10–2 split with both dissents leaning hawkish is a different signal than a quiet hold. The Fed is describing an economy that is growing quickly and prices that are still high, and two voters already wanted to act. That tilts the risk toward another increase, not a cut, at the next meeting. It also lands one day before Q3 GDP showed growth of 3.4%, which supports the Fed’s “strong pace” language.
What this means for small business owners
Know which of your loans float. Business lines of credit, many SBA 7(a) loans and credit cards usually move with the prime rate, which follows the Fed’s target. Fixed-rate term loans do not.
Price the next quarter-point. A 0.25-point increase adds about $250 a year in interest per $100,000 of floating balance. That is small on one loan and real across several.
Use the pause to refinance or lock. If a variable balance is large and your cash flow is steady, ask your lender what a fixed rate costs today.
Keep the books ready for the lender. Current financials and a clean debt schedule make any renegotiation faster.
“Inflation remains elevated,” the Committee wrote in its October 28 statement.
FAQ
What did the Fed do on October 28, 2026? It held the federal funds target range at 3.75%–4%.
How did the Committee vote? 10–2. Lisa Cook and Beth Hammack dissented, preferring a quarter-point increase.
Will my business loan rate change? Only if the loan floats with prime or another benchmark. A hold leaves those rates where September’s increase put them.
When is the next Fed decision? Calendar reports point to December 9. Check the Fed’s schedule.
The bottom line
The Fed did nothing on October 28, and two of its voters wanted to do something. Treat the hold as a window to fix floating-rate exposure before December.
