Fed Holds Rates in 10-2 Vote: What It Means for the Dollar
The US Federal Reserve held interest rates steady on October 28, 2026, but the vote was not unanimous. Two policymakers wanted a rate hike, and the way the dollar reacted to Chair Kevin Warsh’s press conference is the real story for forex traders. This guide explains what the Fed decided, why markets treated the outcome as dovish, and what to watch before the next meeting.
Quick Summary
- Decision: the Fed left its policy rate in the 3.75% to 4.00% range, where it stood after the September hike.
- Vote: 10-2, with two members voting for a hike.
- Tone: the statement described the economy as growing at a strong pace, yet Warsh gave no clear signal on a December move.
- Market reaction: the dollar turned lower after the press conference, then steadied in Asian trade on October 29.
- Next meeting: December 8-9, with US jobs and inflation data due before then.
What the Fed Decided
The Fed held rates at its October 27-28 meeting, as markets widely expected. The surprise was in the details. According to Reuters via Business Recorder, the decision was 10-2, and a second Reuters report confirms the two dissenters voted for a hike. The statement also upgraded the Fed’s view of growth to a strong pace. Reuters noted that the Fed left any change in borrowing costs until after next week’s US midterm election.
The Fed raised rates by 25 basis points in September, its first hike since 2023, so this is a pause after a hike and not the end of the cycle. Our Fed decision preview covers the setup going in.
Why Markets Read the Press Conference as Dovish
The dollar index was holding near two-week highs before the announcement. It turned lower once Warsh began speaking, because he did not give a clear steer on December. Carol Kong, a currency strategist at Commonwealth Bank of Australia, said his silence on further hikes was taken as not hawkish enough. Warsh also said he is confident inflation can return to the 2% target without slowing growth or lifting unemployment, and that pushed traders to scale back their 2027 hike bets.
Treasury yields told the same story. The yield curve steepened after the press conference began, and the two-year yield, which tracks Fed expectations, dipped as low as 4.678% before recovering to about 4.71% in Asian hours.
Warsh also said the Fed will set aside one of its eight scheduled meetings in 2027, and two in 2028, to discuss strategy rather than policy changes. TD Securities called that dovish and warned it could lead to bigger and more frequent moves between meetings later on.
Keep the context in mind. Traders still price roughly a 78% chance of a December hike, according to the CME FedWatch tool as cited by Reuters. So “dovish” here means less hawkish than feared, not a change of direction. That is our reading of the market, not a forecast.
Market Snapshot After the Decision
| Market | Level | Note |
|---|---|---|
| US Dollar Index (DXY) | About 102.26 | Asian hours, October 29 |
| EUR/USD | $1.1134 | Down 0.15% in Asia after a 0.3% gain the session before |
| USD/JPY | About 158.05 | Up 0.14% in early Asian trade |
| US 2-year Treasury yield | About 4.71% | Fell as low as 4.678% during the press conference |
| Fed policy rate | 3.75% to 4.00% | Unchanged |
| December hike odds | About 78% | CME FedWatch, as cited by Reuters |
| Gold (XAU/USD) | Around $4,050 | Held above the $4,025 to $4,035 support zone, per Mitrade |
These levels move all day, so treat them as a snapshot from the morning of October 29 and check your platform for live prices.
What Could Move the Dollar Next
- US inflation and jobs data: Reuters says the Fed will lean on upcoming data. A hot reading would firm up December hike pricing and tends to support the dollar, while a soft reading tends to weaken it.
- ECB and BoJ: the ECB announces its decision later on October 29 and the BoJ finishes its meeting on Friday. Both are expected to hold rates. ING expects the dollar to consolidate near the top of its recent ranges unless one of them springs a hawkish surprise. See our ECB preview and USD/JPY BoJ outlook.
- Oil: US crude was near $102 a barrel on October 28 and Brent traded higher, which keeps inflation worries alive. Read how oil prices affect forex to see which currencies react most.
- Gold: bullion trades inversely to rate-hike expectations more often than not. Our gold price forecast lists the key levels.
How to Trade Around Fed Headlines
- Do not chase the first move. On Fed day the dollar reversed lower within minutes of the press conference starting.
- Check your broker’s spread before you enter, because spreads widen around news. Our guide on forex spreads explains why.
- Decide your stop-loss and position size first. The lot size guide shows the maths.
- Write down why you took the trade. A journal shows whether you really trade news well. See how to use the Hamro Trading Journal.
Frequently Asked Questions
Did the Fed raise interest rates on October 28, 2026?
No. The Fed held its policy rate at 3.75% to 4.00%. The vote was 10-2, and the two dissenters wanted a rate hike.
When is the next Fed rate decision?
The next FOMC meeting is on December 8-9, 2026, with the decision on December 9 at 2:00 PM Eastern Time. That is about 12:45 AM on December 10 in Nepal. Check the Federal Reserve calendar for any changes.
What is a dissent at the Fed?
A dissent is a vote against the majority decision. Here, two members voted for a hike while ten voted to hold. Markets watch dissents because they hint at where policy may go next.
What does a hawkish hold mean?
It means rates stay unchanged but the tone stays firm on inflation, which keeps hike expectations alive. We explain the idea in how central bank rate decisions move forex.
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: Business Recorder (Reuters), Dollar steady after Fed hold leaves rate path murky; Business Recorder (Reuters), Asian shares fall as Alphabet earnings miss; Mitrade, Gold price analysis for October 29, 2026; Federal Reserve, FOMC calendars.
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Educational content, not financial advice. Leveraged trading can lose more than your deposit.
