The US Federal Reserve left its benchmark rate unchanged on 28 October, keeping the federal funds target range at 3.75%–4.00%. The decision was a pause after a hike in September. Two policymakers, Beth Hammack and Lisa Cook, dissented in favour of a further 25-basis-point increase.
The inflation problem
The backdrop is uncomfortable. US consumer prices rose 3.7% year on year in September, and higher energy prices are complicating the outlook. The statement gave no clear signal on whether the Fed will move again in December, leaving markets to read the incoming data.
Markets
The immediate reaction was muted, with the 10-year Treasury yield around 5.03% shortly after the decision. Two days later it had eased to 4.94% as investors bought bonds amid a sell-off in technology shares. Chair Kevin Warsh described the US economy as solid.
Why it matters for leaders
US rates set the price of dollar money worldwide. For Georgia, where more than half of deposits are still in foreign currency, “higher for longer” in the United States means dollar borrowing stays expensive and investors keep demanding high returns from emerging markets.
Sources
- XTB: Fed holds, EURUSD gains (28 October 2026)
- Charles Schwab: Market update, 30 October 2026
- Investor.ge: Investment News, October 2026
Photo: Alex Bierwagen / Unsplash