Fed Decision Preview: What Forex Traders Should Watch on October 28, 2026
The US Federal Reserve announces its latest interest rate decision on Wednesday, October 28, 2026, and the dollar is likely to be one of the most active currencies of the week. Markets expect the Fed to leave rates unchanged, so the focus is on the wording of the statement and on what Chair Kevin Warsh says about the next move.
What the Fed Is Expected to Do
The Fed raised its policy rate by 25 basis points to a range of 3.75% to 4.00% in September, its first hike since 2023. For this meeting, fed funds futures price only about a 10% chance of another quarter-point increase, according to the CME FedWatch tool as reported by FXStreet. The same report says nearly 75% of traders expect at least one more hike by the end of the year.
A pause is the base case, but traders are still leaning toward tighter policy later in 2026. That is why many analysts are watching for a hawkish hold, which means rates stay the same while the tone on inflation stays firm. New to this topic? Read our guide on how central bank rate decisions move forex.
Where the Dollar and Yields Stand Going In
- US Dollar Index (DXY): around 101.9 on Monday, after dipping to 101.45 last week, its lowest level since October 1.
- 10-year US Treasury yield: around 4.98%.
- EUR/USD: near 1.1170 in early Asian trading on Tuesday, below the 1.1200 level.
- USD/JPY: around 157.7 on Tuesday as a risk-on mood lifted the dollar.
These levels move all day, so treat them as a snapshot from October 27 and check your platform for live prices.
Three Things to Watch in the Decision
1. The policy statement
Look for any change in how the Fed describes inflation and the labour market. Small wording changes can move the dollar within seconds of the release.
2. Dissenting votes
A dissent in favour of a rate hike would suggest a more hawkish committee than markets expect. Analysts at MUFG say a hawkish overall tone, including possible dissents, would not be surprising.
3. The press conference
Chair Warsh speaks shortly after the decision. Traders will listen for hints about the December meeting and for how the Fed weighs inflation against growth. US Q3 GDP and Core PCE inflation data arrive on Thursday, October 29, and will shape expectations further.
Possible Scenarios for the US Dollar
| Scenario | What the Fed does or says | Common dollar reaction |
|---|---|---|
| Hawkish hold | Holds rates, signals more hikes, possible dissents | Dollar often firms and yields rise, while EUR/USD and gold come under pressure |
| Neutral hold | Holds rates with a data-dependent tone | Smaller move, and prices may stay in a range |
| Dovish surprise | Holds and plays down further hikes | Dollar often softens, while EUR/USD and gold may rise |
These are common patterns, not forecasts or guarantees. Reactions to central bank news can reverse within minutes.
Fed Decision Time in Nepal
The decision is due at 2:00 PM Eastern Time on Wednesday, which is 11:45 PM in Nepal. The press conference follows at about 12:15 AM on Thursday, October 29. US clocks go back on November 1, so these times shift by an hour after that. Confirm the exact time on your broker’s calendar, and use our live forex market hours clock to see which sessions are open. For the full list of events, read our forex week ahead guide.
How to Manage Risk Around the Fed
- Reduce your position size, or stay flat, if you cannot accept a sudden spike against you.
- Expect wider spreads and slippage around the release. Our guide to forex spreads explains why costs rise during news.
- Avoid placing stops at obvious round numbers right before the announcement.
- Let the first volatile minutes settle, and consider waiting for the press conference before entering.
- Keep risk per trade small, and decide your stop-loss before you click buy or sell.
This article is for education only and is not financial advice. Forex trading carries a high level of risk and you can lose more than you expect.
Sources: FXStreet, Euro weakens below 1.1200 as traders brace for Fed, ECB rate decisions; FXStreet, Japanese Yen weakens with Fed and BoJ monetary policy meetings in focus; MUFG view via ExchangeRates.org.uk; RoboForex, Fed meeting October market week ahead.
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Educational content, not financial advice. Leveraged trading can lose more than your deposit.
