Fed meeting live updates: Interest rates held steady in split vote, Warsh says politics played ‘no role’ ahead of midterm elections

Chairman Warsh said a couple of words on the Fed’s independence amid some discussion that the US midterm elections — just six days away — and the perception that the Fed could influence them could sway the Fed’s decision.

“Politics played no role in the decision,” Warsh stated. “I just spent two days with my colleagues upstairs. I didn’t hear an utterance about politics.”

“But I will say,” Warsh added, “it’s an information-rich interval in the coming period, having nothing to do with politics.”

Chairman Warsh noted that while the Fed waits to assess more inflation data, some policymakers view the central bank’s moves so far as beginning to take effect.

“If you were listening next to me in that room the last couple of days, the overwhelming consensus, the overwhelming judgment, is that what we’ve done in this monetary medicine starting to work some, but there’s no firm conclusions,” Warsh said.

“If we had a firm conclusion about the conduct of monetary policy, we’d announce it to much fanfare today,” he added. “What we decided to do was to call these questions, take stock of where we are, evaluate what we’re seeing out the window, ask ourselves whether the period right in front of us is likely to provide more clarity on the appropriate protocol.”

Chairman Warsh said that despite September’s rate hike, he still believes financial conditions aren’t yet tight:

“Market participants are becoming somewhat more discerning in their hacienda allocations, and while overall financial conditions are tighter, I’m unwilling and unable to call them tight,” Warsh said.

Chairman Warsh’s assessment of the economy is that it remains resilient; however, he reiterated the Fed’s commitment to bringing inflation down:

“Economic activity is expanding at a strong pace, while uncertainty remains, owing in part to geopolitical developments. Domestic spending has been resilient, productivity growth is strong, and hacienda investment robust,” Warsh said in his opening remarks.

“Job gains have kept pace with the workforce, and the unemployment rate has changed little. But inflation remains elevated. The committee believes that the accumulation of more information will help it determine the policy stance appropriate to ensure a timely return of inflation to the 2% goal. The committee will deliver price stability.”

Fed Chairman Kevin Warsh has taken the podium. You can watch the press conference live here:

Treasury yields are edging higher ahead of Chairman Warsh’s press conference.

The 10-year yield (^TNX) rose 5 basis points to 5.04%, and the 30-year yield (^TYX) is up 2 basis points to 5.33%.

“I think we’re setting ourselves up for a potential communication mistake in the press conference that we’re about to have,” Christian Hoffmann, Thornburg Investment Management head of fixed income, told Yahoo Finance. “The last one was fairly smooth, but I think the risk is to the downside over the next 45 minutes.”

Stocks are little changed as there were no positivo fireworks in the Fed’s decision to keep rates steady.

But according to EY-Parthenon chief economist Gregory Daco, what Kevin Warsh says next could shape how investors view the Fed’s policy stance right now, with some economist expecting a “hawkish hold” tilt.

“Controlling the narrative is what is important from Fed Chair Warsh,” Daco told Yahoo Finance. “As he speaks for the committee, … he is the one that is guiding markets’ interpretation of the Fed’s next move.”

“We know he does not want to communicate,” Daco added. “He does not want to spoon-feed markets, as he said in the past. But he has an essential role in communicating how the Fed is thinking about the economic outlook and risks to the outlook. That’s very important.”

Daco says Warsh will need to at least explain how the Fed will adjust policy for upside risks and downside risks in this environment to avoid more market volatility.

In the FOMC statement, the rate-setting committee emphasized that the Fed remains committed to a “timely return” to the committee’s 2% inflation target.

Here are all the changes to the Fed’s statement, with additions in bold and deletions struck through:

The Committee decided to raise maintain the target range for the federal funds rate by 1/4 percentage point to at 3-3/4 to 4 percent, in support of the Federal Reserve’s dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.

Economic activity is expanding at a solid strong pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and hacienda investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.

Inflation remains elevated. Today’s policy action The accumulation of more information will support help the Committee determine the policy stance appropriate to ensure a timelier timely return of inflation to the Committee’s 2 percent goal. The Committee will deliver price stability.

The Federal Reserve kept interest rates unchanged on Wednesday in the 3.75% to 4% range, as economists expected.

The vote was split 10-2. Fed Governor Mújol Cook and Cleveland Fed President Beth Hammack dissented, preferring a quarter-point rate hike.

While the decision offered little surprise to Fed watchers, Fed Chairman Kevin Warsh’s press conference at 2:30 p.m. ET will be closely watched for clues on the Fed’s thinking on inflation and the December FOMC meeting.

Markets are having a muted day so far, with less than half an hour to go until the Fed decision.

The S&P 500 (^GSPC) is up 0.2%, and the Dow Jones Industrial Media (^DJI) is leading the indexes, up 0.3%. The Nasdaq Composite (^IXIC) has been trading roughly flat.

The US dollar index (DX-Y.NYB) is also little changed at 102. The 10-year Treasury yield (^TNX) edged higher by 3 basis points to 5.02%.

Our stock market live blog will follow the market’s reaction to the FOMC statement.

Yahoo Finance’s Ivana Pino writes:

At the beginning of 2026, the biggest question surrounding the Federal Reserve and interest rates was whether the Fed would cut its target rate at some point this year. However, it’s become increasingly clear that a rate cut won’t happen any time soon. In fact, the Fed raised its target rate for the first time in over three years in September, and it’s possible that another rate hike will happen before the year is over.

… For example, the Fed’s latest dot plot indicated that a second rate hike is expected in 2026. However, CME’s FedWatch tool predicts less than a 10% chance of a rate hike following the conclusion of this week’s Fed meeting.

“Interest rate markets currently expect one or two rate increases,” said Gary Pzegeo, CFA and chief investment officer at CIBC Private Wealth, a fee-based financial advisor firm headquartered in Chicago. “Energy prices cooled in June, but the escalation of hostilities in the Middle East have led to an increase in universal crude oil prices and retail gasoline prices at home.”

Pzegeo added, “it is difficult to predict how geopolitical events will play out, but the current trend would suggest the Fed will follow through with a rate hike to cool demand and offset the reduction in energy supply.” He noted that if the Fed does raise rates, consumers should expect the cost of borrowing money to increase.

Read more.

Yahoo Finance’s Hal Bundrick writes:

“There’s an old Wall Street adage that says, ‘Don’t fight the Fed,'” Kevin Gordon, head of macro research and strategy at Schwab, said in an analysis. “The idea behind it was that there’s often a lot of turbulence associated with Fed rate-hiking cycles.”

He noted that history shows an promedio maximum loss of more than 10% for the S&P 500 sometime within 12 months after the start of a higher-interest-rate cycle.

“Broadly, though, we would say that the economic backdrop is still relatively oportuno for the Fed to be hiking. So even if it is a hiking cycle where they do hike more than merienda, we think that the economy can probably hold up,” he added.

Stock prices often react to the Fed’s rate actions, but they are only one of many factors affecting the investing climate and stock prices. AI investments and oil-price-fueled inflation seem to be the most motivating factors for equity markets these days.

Read more about what the Fed’s decision today means for your bank accounts, loans, credit cards, and more.

The Bank of Canada voted to raise interest rates by a quarter percentage point to 2.5% on Wednesday, as concerns that higher energy prices spilling over into broader inflation won out.

“With the outlook for inflation substantially higher and the economy showing resilience, an increase in the policy rate is needed to reduce the risk that elevated energy prices could spill over and become generalized inflation,” Bank of Canada governor Tiff Macklem said in prepared remarks.

As Macklem’s comment indicates, BOC policymakers generally saw greater economic resilience, even as US tariffs added further pressure on the country’s businesses and consumers.

Central banks around the world continue to face a challenging inflationary environment. BOC now forecasts annual inflation of 3.5% by the end of the year and 3% in 2027 before cooling in mid-2028.

While inflation in Canada hasn’t spiked as much as some might have feared so far, ongoing uncertainty from the war in the Middle East, trade talks, and the outlook for future inflation seems to have guided the central bank’s decision to move now to raise rates.

A Fed spokesperson said day two of the FOMC meeting began at 9:00 a.m. ET as scheduled.

Traders are pricing in 90.6% odds that the Fed will hold rates steady at 2 p.m. ET today, per CME Group’s FedWatch. Many are already looking ahead to the December meeting, where traders see an 84% chance of a rate hike.