Fed Meeting Oct 28: What to Expect and Why Oil Matters

Last updated: October 25, 2026. This is a preview written before the decision. We will update it on Wednesday.

At 2:00 p.m. Eastern on Wednesday, October 28, the Federal Reserve will tell America where interest rates are going. Almost everyone expects the answer to be "nowhere, for now." But the real story is hiding in a different place: a press conference, a barrel of oil above $100, and an inflation number that refuses to behave.

Here is what is expected, what could surprise markets, and why gasoline prices have quietly become part of the Fed's problem.

3.75-4.00%

current federal funds target range

~9 in 10

chance markets give a hold in October

3.7%

consumer prices year over year (September CPI)

$100+

WTI crude oil, closing near $103 on Friday

The short version

• When: The meeting runs October 27 and 28. The decision is due Wednesday at 2:00 p.m. ET, followed by a press conference by Fed Chair Kevin Warsh.
• What is expected: No change in rates. Futures markets put the odds of a hold somewhere between roughly 85% and 94%, depending on the source and the day.
• What matters most: What Warsh says next, especially about a possible hike at the December 8-9 meeting.
• The wild card: Oil prices. Higher energy costs are feeding inflation, and inflation is what drives Fed decisions.

How the Fed got here

Earlier this year the Fed was holding its target range at 3.50% to 3.75%, meeting after meeting. Then inflation stopped cooperating. At its September 15-16 meeting, the Fed raised rates by a quarter point to the current 3.75% to 4.00%.

The September inflation report did not calm anyone. Consumer prices were up 3.7% from a year earlier, and a surprise 0.3% monthly jump in core prices briefly pushed the odds of an October hike above 50%, according to analysis from PIMCO. That did not last. Comments from several Fed officials signaled there was no rush to decide on the next move, and the chance of an October hike faded to around 5% to 10%, depending on the measure.

For context, inflation has now been above the Fed's 2% target for roughly five years, and much of the recent pressure has come from rising energy prices and disrupted supply chains linked to the Middle East.

The oil connection most people miss

Why does a central bank in Washington care about the price of crude? Because energy touches almost everything: shipping, groceries, flights, plastics. When oil jumps, price increases tend to spread, and the Fed has less room to relax.

On Friday, October 23, WTI crude closed just above $103 a barrel, and the Dow fell about 600 points as higher oil weighed on sentiment. Drivers have felt it already. AAA says the national average for regular gasoline was about $4.30 a gallon as of October 19, up from roughly $3.11 a year earlier. AAA also noted that this is the first October on record with the national average above $4.

Part of the oil story is geopolitical. We have explained the rising US-Iran tension and why analysts worry about a miscalculation in a separate article. For the Fed, the point is simple: if oil stays high, inflation is harder to bring down, which keeps December hike talk alive.

Three ways Wednesday could go

Scenario	How likely (per markets)	What it could signal
Hold, with a tough tone	Most likely	Rates stay put, but the Fed signals more hikes could follow if inflation does not cool.
Hold, with a softer tone	Possible	The Fed suggests the September hike may be enough for now.
Surprise hike to 4.00-4.25%	Unlikely (roughly 5% to 15%)	Would reprice expectations for how high and how fast rates could go.

Not everyone agrees on the path. PIMCO expects a hold in October but a clear tightening bias, with a quarter-point hike in December as its most likely next move. Bank of America, by contrast, had kept an earlier forecast of an October hike, pointing to worsening inflation. Futures markets, meanwhile, firmly expect a hike on December 9.

What to watch on Wednesday

1. The statement, at 2:00 p.m. ET. Small changes in wording, especially about inflation and the pace of future moves, often move markets.
2. Warsh's press conference. Analysts say investors want to know what evidence the Fed would need before hiking again. Warsh has moved away from forward guidance, so markets have less visibility than usual, which makes his words matter more.
3. Any dissents. A split vote can reveal how divided the committee is.
4. Signals about December 8-9. This is the meeting where the next move is widely expected.

It is also a packed week for Wall Street beyond the Fed. Roughly a third of S&P 500 companies report earnings, including Microsoft, Alphabet and Amazon. Third-quarter GDP and the September PCE inflation report both arrive Thursday. Reuters has described the AI-driven stock rally as "rickety," and the Nasdaq's 2.9% drop last Thursday was its biggest one-day fall since June, so the week is being watched as a test of whether heavy AI spending is paying off.

What it means for everyday people

• Credit cards and variable-rate loans: These tend to react quickly to Fed moves. A hold means no new increase, but rates are already higher than a few months ago.
• Savings accounts: Higher rates generally help savers, though banks do not always pass increases along immediately.
• Mortgages: Mortgage rates follow longer-term Treasury yields more than the Fed's target rate. The 10-year yield was reported to be still below 5% on Friday, and one real estate analysis expects mortgage rates to stay near 7% for now.
• Gas and groceries: The Fed cannot lower oil prices. Its rate decisions work slowly, over months, not days.

Not financial advice. This article explains events and does not recommend buying, selling or borrowing. For decisions about your own money, consider speaking with a licensed professional.

Frequently asked questions

When is the Fed meeting in October 2026?

October 27-28. The rate decision comes Wednesday, October 28, at 2:00 p.m. Eastern, with a press conference about 30 minutes later.

What is the current federal funds rate?

The target range is 3.75% to 4.00%, after a quarter-point increase in September.

Will the Fed raise rates in October?

Markets say it is unlikely. Futures pricing puts the chance of a hike at roughly 5% to 15%, depending on the source. A December hike is seen as much more likely.

Who is the Fed Chair?

Kevin Warsh.

When is the next Fed meeting after October?

December 8-9, 2026.

How do oil prices affect the Fed?

Higher energy costs push up prices across the economy, which can keep inflation above the Fed's 2% target and make rate cuts less likely, or hikes more likely.

The bottom line

The decision itself may be the least interesting part of Wednesday. The question is whether the Fed uses the press conference to prepare the ground for a December hike, or to suggest it can pause. With oil above $100 and inflation at 3.7%, the pressure is clearly pointing one way. We will update this article after the announcement.

Sources: Yahoo Finance, Forbes, PIMCO analysis (via Forex Factory), CME FedWatch data as cited by Kiplinger and others, Yardeni Research, MarketWatch (via Vietnam.vn summary), AAA and the Federal Reserve's published meeting calendar. Market odds change daily and differ by source. Quotes and figures are as reported at the time of writing.