{
  "id": 16909711,
  "title": "How the Fed is likely to act on interest rates just days before the midterm elections",
  "url": "https://urgent.news/2026/10/28/how-the-fed-is-likely-to-act-on-interest-rates-just-days-before-the",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-28T13:30:00.000Z",
  "source": {
    "name": "Fast Company",
    "slug": "fast-company",
    "url": "https://www.fastcompany.com/91631359/how-fed-likely-act-interest-rates-days-just-before-midterm-elections"
  },
  "original_language": "en",
  "account": "The Federal Reserve is expected to maintain its current interest rate stance on Wednesday, despite recent spikes in inflation linked to the Iran war and its impact on oil and gas prices. This decision comes less than a week before the midterm elections, which have been dominated by concerns over the cost of living and affordability. Rising expenses for gas, groceries, clothing, and other goods have led consumers to grow dissatisfied with the current state of the economy. The Federal Reserve, under the leadership of Chairman Kevin Warsh, aims to bring inflation back to its 2% target, typically achieved by increasing short-term interest rates. Higher borrowing costs can, over time, temper spending and slow down inflation.\n\nWarsh faces several challenges in achieving this objective. President Donald Trump criticized the Fed for the recent rate hike, though he mainly targeted the central bank's committee responsible for setting rates, rather than Warsh himself. Moreover, some of the factors fueling inflation, such as the rapid expansion of artificial intelligence infrastructure and higher energy prices, are difficult to curb with higher interest rates. Meanwhile, other sectors of the economy are already facing the consequences of higher rates, which were already on the rise due to market forces even before the Fed's September rate increase. The average 30-year mortgage rate hit a three-year high of 7.4% earlier this month, but has since slightly decreased. This rate hike has made homeownership unaffordable for an additional 5 million Americans since the start of the year, according to Oxford Economics, a consulting firm. Higher mortgage rates have made mortgages, auto loans, and credit card borrowing more expensive, further contributing to Americans' perception that items like homes and cars are becoming increasingly costly.\n\nUpon announcing its rate decision, Warsh will deliver a news conference, where his comments will be closely scrutinized for insights into the Fed's future actions. He is expected to reiterate the Fed's commitment to a \"timelier\" return of inflation to its 2% target. Some analysts may interpret this as a signal that the Fed may raise its key rate at its next meeting in December, a move that is already widely anticipated by Wall Street investors. If the Fed decides to keep rates unchanged, Warsh will have to justify the September rate hike, which occurred despite the more substantial increase in inflation compared to February. Inflation rose by 3.7% in September compared to a year ago, significantly higher than the 2.4% rate in February, just before the Iran war. Monthly data shows the consumer price index (CPI) increased by 0.3% in both August and September, with core prices (excluding food and energy) rising by 3.1% in September, up from 3% in August. Aditya Bhave, head of U.S. economics at Bank of America, believes that economists and the Fed have become too complacent about inflation remaining above the target. He argues that higher oil and gas prices will likely keep inflation elevated for several more months, while rising diesel costs will increase shipping prices for virtually every product, potentially spreading inflation throughout the economy. Bhave warns that unless the Fed takes this issue seriously and stops making excuses about inflation, it may not return to the 2% target until the next recession. Warsh is likely to keep Wednesday's press conference brief, similar to his predecessor's approach. Jerome Powell usually held news conferences lasting around 45 minutes, while Warsh's prior press conference lasted approximately 30 minutes. The Fed's policy meeting coincides with a busy week for central banks globally, with the Bank of Canada also meeting on Wednesday and expected to raise its key rate by a quarter point to 2.5%. Policymakers at the European Central Bank and Bank of Japan are scheduled to meet on Thursday and are anticipated to maintain their key rates. For Warsh and the Fed, another crucial factor is the robust growth of the U.S. economy and low unemployment rate of 4.2%. However, even though job creation is sluggish, government data is set to be released on Thursday, showing a 3% growth rate for the July-September quarter, up from 2.2% in the April-June quarter. Economists argue that solid growth indicates that interest rates are not excessively high and the economy can withstand higher rates to combat inflation.",
  "summary": "The Federal Reserve is expected to stand pat on interest rates Wednesday even though inflation has accelerated in the past couple of months as the Iran war has caused spikes in oil and gas prices . The Fed’s latest policy meeting concludes less than a week before the midterm elections , which have focused heavily on concerns about the cost of living and affordability . Consumers have generally…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}