The Fed Is Expected to Keep Rates Where They Are This Week

Financial markets put about a 90% chance on the Federal Reserve leaving interest rates unchanged at its October meeting, according to CME. The decision comes Wednesday, the last day of the Fed's October 27-28 meeting. Government bond yields were mixed ahead of it.

The rate in question is the federal funds rate. It is the target the Fed sets for the overnight rate at which banks lend cash to one another. Think of it as the base price that many other interest rates are built on. A Reuters poll expected the Fed to keep that rate in a range of 3.75% to 4.00%.

A hold would leave that target unchanged. That matters for anyone with a floating-rate loan, meaning a loan whose interest rate moves up and down. It also matters for adjustable mortgages and many short-term savings rates.

A yield is the annual return on a bond, shown as a percentage. Yields move in the opposite direction to bond prices. When yields are described as mixed, some rose and others fell across bonds of different lengths. No single signal stood out. That usually happens when traders are waiting for news, not changing their view on where rates are heading.

The rate picture has been more debated than a simple hold suggests. In June, Treasury yields rose after Fed officials hinted that their next move could be a rate increase. That hint still sits behind this week's pricing. Traders who bet on higher rates over the summer now face a meeting where most expect no change.

The Fed holds eight regularly scheduled meetings a year. The next one after this week is set for December 8-9, 2026. It comes with a Summary of Economic Projections, which is the Fed's collection of economic forecasts. Those forecasts will tell you more about where rates may go than a single held rate does.

In my view, the 90% figure says less about what the Fed will do than about how much of the decision is already priced in. Priced in means traders have already built the expectation into market prices. These odds reflect what people are paying for, not what the Fed has promised. A hold that everyone expects should move yields less than a surprise would. That is why attention is shifting to the wording of the Fed's statement and to what officials say about the months ahead.

Stocks are moving on a separate track. In January, Bloomberg reported that Microsoft, Amazon, Alphabet and Meta were expected to spend roughly $475 billion on capital expenditures in 2026, up from $230 billion in 2024. Capital expenditures are the funds companies spend on long-lasting assets like data centers and equipment. In late October, Bloomberg reported that the Bloomberg Magnificent Seven Index, which tracks a group of large technology stocks, was up 6.5% so far this year. The S&P 500, a broad index of large U.S. companies, was up 11% over the same period.

That gap means the broader market has done better than the group of big tech companies whose spending plans were the focus of those January estimates. For anyone watching interest rates, the scale of that spending matters. Companies pay for it partly by borrowing, which depends on how much investors want to lend them money over long periods. If that appetite changed, the effect could reach Treasury yields through the same routes that Fed decisions travel.

This week, watch the Fed's statement, the press conference that follows, and where yields settle once the outcome is known. The decision itself is scheduled, and the odds going into it are high. What the Fed says about its next move is the open question.