The Federal Open Market Committee opens a two-day policy meeting Tuesday, October 27, and 94 of the 100 economists Reuters surveyed between October 16 and October 20 expect the Committee to leave its federal funds target range at 3.75% to 4.00% when the decision publishes Wednesday afternoon. A hold at that level keeps the U.S. prime rate at 7.00%, where banks have posted it since the Fed raised rates a quarter point on September 16. The survey carried a second finding that matters more for anyone planning into next year: all 100 economists now expect an increase at the December 8-9 meeting, against fewer than half who said so a month earlier. Wednesday reads as a pause inside a tightening cycle, not the end of one. Treasury markets have already repriced around that reading. The two-year note yielded 4.65% on October 22 and the one-year bill yielded 4.41%, both above the 4.00% ceiling of the current target range, according to the Federal Reserve’s H.15 release. Households carrying variable-rate balances get a reprieve this week with a date attached to it. Our current prime rate page tracks the posted rate, and the Federal Reserve meeting schedule lists every remaining 2026 decision date.
- Reuters surveyed 100 economists from October 16 to October 20. Ninety-four expect the Fed to hold Wednesday.
- A hold keeps the target range at 3.75% to 4.00% and the prime rate at 7.00%.
- All 100 economists in that same survey expect a quarter-point increase at the December 8-9 meeting.
- September consumer prices rose 3.7% over 12 months, with core at 2.6%, the Labor Department reported October 14.
- Third-quarter GDP and September PCE both publish Thursday, October 29, the morning after the decision.
What the Reuters Survey Found
Reuters polled 100 economists between October 16 and October 20, in the window after the September consumer price report and before the Committee gathered. Ninety-four said the Fed will hold its target range at 3.75% to 4.00% on October 28. Six expected an immediate increase. The agreement arrived one meeting later and it was total: every economist in the sample, all 100 of them, said the Fed will raise rates at the December 8-9 meeting. A month earlier, fewer than half held that view. Morgan Stanley’s Michael Gapen told Reuters the risks point toward a Fed that ultimately needs to raise rates more than his team currently expects. The shift reflects inflation data that has stopped cooperating.
The split between October and December is a statement about sequencing rather than direction. The question in front of the Committee Wednesday is whether to move now, on a September inflation reading that ran hot at the headline level, or to wait six weeks for a meeting that carries a fresh Summary of Economic Projections and an updated dot plot. The Fed’s published calendar shows October 27-28 without projections and December 8-9 with them. A Committee that wants its forecast and its policy move to land in the same release has a structural reason to prefer the later date. Waiting also buys two more months of data, including the October consumer price report due November 10 and the personal consumption figures that follow it. Our Fed rate forecast for 2026 tracks how those expectations have moved through the year.
The Week Ahead for Rates
Wednesday’s statement is not the only release that moves rates this week, and it is not even the most consequential one for the December call. The Bureau of Economic Analysis publishes two reports Thursday, October 29, at 8:30 a.m. Eastern: the advance estimate of third-quarter gross domestic product and the September personal income and outlays report, which contains the personal consumption expenditures price index. The Committee treats core PCE as its primary inflation gauge, and the sequencing this week is unusual. The Fed decides Wednesday afternoon, then the inflation measure it weights most heavily arrives the following morning. Anyone reading Wednesday’s statement for signals about December should read Thursday’s PCE print alongside it, because the second number will shape the first one’s meaning.
The backdrop on the fiscal side has kept moving as well. Total public debt outstanding reached $40,444,342,709,389.15 on October 22, according to Treasury’s Debt to the Penny series, and the Federal Reserve’s own balance sheet stood at $6.754 trillion on October 21. Long Treasury yields have held near the top of their multi-year range, with the 10-year at 4.96% and the 30-year at 5.29% on October 22. The gap between the 10-year and the two-year was 0.31 percentage points on October 23, a curve that is positively sloped but thin by historical standards. Our Treasury yield curve tracker and inflation tracker carry the running series.
Why December Became the Consensus
The September consumer price report, published October 14, is the proximate reason the December call hardened. Headline prices rose 3.7% over the 12 months through September and 0.6% in the month alone, the largest monthly increase since the spring. Core prices, which strip out food and energy, rose 2.6% over the year and 0.3% in September, the same monthly pace as August. The unusual shape of that report, with headline inflation running a full point above core, points at energy costs rather than broad services pressure. For a Committee that has set an explicit 2% objective, a 3.7% headline print is uncomfortable regardless of what is driving it.
The Committee has already acted once on that signal. On September 16 it raised the target range a quarter point to 3.75% to 4.00% on a unanimous 12-0 vote, and the statement accompanying the decision said plainly that inflation remains elevated. Banks lifted prime to 7.00% the same day. Short-term Treasury yields have been pricing a follow-up ever since. The one-month bill yielded 4.11% and the three-month bill 4.22% on October 22, both near the current range, while the one-year reached 4.41% and the two-year 4.65%. A front end trading 40 to 65 basis points above the ceiling of the target range is the market writing down its own forecast of where policy goes next, and that forecast points up.
What a Hold at 7.00% Changes for Your Money
The prime rate is not set by the Fed. Banks post it, and by long convention they post it 300 basis points above the top of the federal funds target range, which is how a 4.00% ceiling produces a 7.00% prime. Hold the range Wednesday and prime stays at 7.00%, so variable credit card APRs, HELOC rates, and most variable personal and small business loan rates stay where they are through at least early December. The Fed’s G.19 release, published October 7, puts the average rate on credit card plans at 21.19% across all accounts and 22.36% on accounts assessed interest as of August, with 24-month personal loans at 11.90% and 60-month new car loans at 7.54%.
Price the December meeting instead of this one. A quarter-point increase would take prime to 7.25% and add roughly $25 a year for every $10,000 of variable balance, which is about $125 on a $50,000 home equity line. Card issuers typically pass a prime change through within one or two statement cycles. Savers sit on the other side of the same trade, and deposit rates move up more slowly than loan rates do, which is why shopping matters more than waiting. Compare high-yield savings accounts and current CD rates before the December meeting, and if you are carrying revolving debt at 21% or more, a fixed-rate personal loan removes the prime exposure entirely. Mortgage borrowers follow a different chain, since 30-year mortgage rates track the 10-year Treasury rather than prime.
Use the next six weeks rather than waiting them out. Three dates decide the December call: Thursday’s PCE print on October 29, the October consumer price report on November 10, and the decision itself on December 8-9. If you carry a variable balance, the cheapest move available right now is to fix the rate before prime moves, not after. If you are shopping deposits, lock a CD term that runs past December only if its yield already beats the top liquid savings rates, because a hike would lift those too.
Frequently Asked Questions
Will the Fed raise rates in October 2026?
Probably not. Of the 100 economists Reuters surveyed October 16 to October 20, 94 expect the Fed to hold its target range at 3.75% to 4.00% on October 28, which keeps the prime rate at 7.00%. Six expected an immediate increase.
What is the projected prime rate for 2026?
The prime rate stands at 7.00% and has since September 16, 2026. If the October meeting ends in a hold and the December 8-9 meeting delivers the quarter-point increase every economist in the Reuters survey expects, prime would finish 2026 at 7.25%. That path is a forecast, not a commitment. The Committee publishes an updated Summary of Economic Projections at the December meeting, which will be the first official read on where officials see rates settling in 2027. Our Fed rate forecast page tracks revisions as they land.
What happens to the prime rate if the Fed hikes in December?
Prime moves the same day, by the same amount, in the same direction. Banks post prime 300 basis points above the top of the federal funds target range by convention, so a quarter-point increase to a 4.00% to 4.25% range would put prime at 7.25%. That happened most recently on September 16, when the Fed raised the range and banks moved prime from 6.75% to 7.00% within hours. There is no lag at the posting stage, though there is a lag before the change reaches your statement.
How soon would my credit card APR change after a Fed hike?
Usually within one or two statement cycles, so roughly 30 to 60 days. Variable card APRs are written as prime plus a fixed margin, and the index resets on a schedule set in your cardholder agreement, often the first day of the billing cycle following the change. The Fed’s G.19 release put the average credit card rate at 21.19% across all accounts in August and 22.36% on accounts assessed interest. A quarter-point increase adds about $25 a year per $10,000 of carried balance.
Why is the two-year Treasury yield above the Fed’s target range?
Because the two-year note prices the average policy rate over the next 24 months, not today’s rate. It yielded 4.65% on October 22 while the target range topped out at 4.00%, a 65 basis point gap that says investors expect the average fed funds rate over that horizon to run above the current setting. The one-year bill at 4.41% says the same thing over a shorter window. Front-end yields above the ceiling are the clearest market signal that more tightening is expected.
What data could change the Fed’s December decision?
Three releases carry the most weight. The September personal income and outlays report publishes October 29 and contains the core PCE price index, the Committee’s preferred inflation measure. The October consumer price report follows on November 10. Monthly employment data between now and December 8 fills in the other half of the dual mandate. A sharp cooling in core PCE or a visible break in payroll growth would give the Committee room to wait. A third consecutive firm inflation print would not.
Watching the Fed Through December
Wednesday settles six weeks, not the cycle. The statement language on inflation, any dissents recorded in the vote, and Thursday’s PCE print together will tell borrowers more about December than the rate decision itself does. Until the Committee meets again on December 8-9, prime at 7.00% is the number that prices variable debt. Track it on our current prime rate page, see the mechanics on how Fed decisions reach your loans, and check remaining dates on the 2026 Fed meeting schedule.
References
- Board of Governors of the Federal Reserve System. “FOMC Calendars, Statements, and Minutes.” federalreserve.gov
- Board of Governors of the Federal Reserve System. “Federal Reserve issues FOMC statement,” September 16, 2026. federalreserve.gov
- Board of Governors of the Federal Reserve System. “H.15 Selected Interest Rates,” released October 23, 2026. federalreserve.gov
- Board of Governors of the Federal Reserve System. “G.19 Consumer Credit,” released October 7, 2026. federalreserve.gov
- U.S. Bureau of Labor Statistics. “Consumer Price Index, September 2026,” released October 14, 2026. bls.gov
- U.S. Bureau of Economic Analysis. “News Release Schedule.” bea.gov
- U.S. Department of the Treasury, Fiscal Data. “Debt to the Penny.” fiscaldata.treasury.gov
- Federal Reserve Bank of St. Louis. “FRED Economic Data: DPRIME, DGS1, DGS2, DGS10, DGS30, T10Y2Y, WALCL.” fred.stlouisfed.org
