The Federal Reserve is widely expected to deliver a Fed rate hold today, leaving its benchmark in a 3.75% to 4% range after raising it in September for the first time since 2023. Officials are assessing inflation still above the 2% target, driven partly by energy prices from the war with Iran. A pause would not undo last month’s increase, but it would keep the central bank from pushing borrowing costs higher before the midterms.
Key Takeaways
- Fed is widely expected to hold rates at 3.75% to 4% today.
- September’s hike still feeds into card and loan costs over billing cycles.
- Markets still price another quarter-point increase in December.
- September CPI hit 3.7%, and producer prices rose 6.3%.
What a Fed Rate Hold Means for Borrowing Costs
USA TODAY’s meeting coverage puts the announcement at 2 p.m. ET, with Chair Kevin Warsh at 2:30 p.m. ET. CNN, citing CME FedWatch, reported a 93% chance of no change today and a 78% chance of a December hike. CNBC’s FedWatch reading put the odds of an October increase below 10%.
September’s quarter-point hike is still moving into variable rates. USA TODAY noted it often takes one to two billing cycles to reach credit card APRs. On a $100 balance, one such increase may add about 25 cents of interest a year; two, about 50 cents.
“Chances are, we’re talking about an extra dollar or two a month when it comes to the typical credit card bill, but when you’re struggling with debt, when the prices of seemingly everything are rising, every dollar counts,” Matt Schulz, LendingTree’s chief consumer finance analyst, told USA TODAY.
Borrowing costs have already edged up since September, CNBC reported. Credit card rates are the highest since late 2025, while auto loans have stayed near 7%. Thirty-year mortgages remain above 7%, and CNN said the 10-year Treasury rose to 5.03%.
| Rate | Now | Since September |
|---|---|---|
| 30-year mortgage (MND) | 7.33% | Up from 7.12% |
| Home equity loan (Bankrate) | 8.77% | Up from 8.28% |
| Five-year CD (Haver) | 1.83% | Up 8 basis points |
| Money market (Haver) | 0.45% | Up 1 basis point |
For small firms, that is a pause in new pressure, not relief from September. On cash, USA TODAY reported a 0.38% national average savings rate, while some high-yield accounts at 4% APY could stay slightly ahead of 3.7% inflation before taxes. Wage growth was 3% over the year.
Inflation Still Above the Fed’s Target
CNN reported September consumer prices rose 0.6% on the month and 3.7% over the year, up from 0.4% and 3.4% in August. About half of that monthly gain is attributed to rising gas prices tied to the war in Iran. Core CPI still rose 0.3% on the month and 2.6% on the year.
CNN also reported an average pump price of $4.24 a gallon on Wednesday, a separate reading driven largely by the war. CNBC said the producer price index rose 6.3% over the year in September, the steepest 12-month increase since 2022.
The Fed’s preferred PCE index was up 3.4% over the year in August, USA TODAY noted, citing the Bureau of Economic Analysis. Thursday’s September reading is expected to rise 0.5% on the month. CNN and CNBC differ slightly on the annual figure.
Chicago Fed President Austan Goolsbee told NPR the danger is inflation “shifting more to just old-fashioned overheating of demand.” Beth Hammack of the Cleveland Fed said Oct. 12, “With each passing month, persistently elevated inflation raises the risks of an inflationary mindset becoming entrenched in the economy.”
Vice Chair Philip Jefferson said, “My colleagues and I will need to come to our own judgment, which may take more time.”
Jobs, Confidence, and a December Hike
Employers added 29,000 jobs in September, and unemployment ticked up to 4.2% from 4.1% in August, the Labor Department estimated. Initial claims fell to 194,000 for the week ending Oct. 17, the lowest since the week of July 18.
LinkedIn’s Kory Kantenga said in a note to USA TODAY that the data give the Fed more reason to remain vigilant on inflation than to react to one soft jobs report.
The Conference Board’s index rose to 91.7 in October, up 7.5 points from 84.2, the lowest since May 2014. Fergus McCormick said the improvement was in line with gas prices easing after they spiked in September. That 91.7 reading is the focus of our report on October consumer confidence.
The decision comes less than a week before the midterms. President Donald Trump has repeatedly called for lower rates, CNN reported, while rate decisions follow economic conditions, not political demands. Forecasters expect another quarter-point increase in December, USA TODAY reported.
What Small Businesses Should Budget For
An expected hold stops a new increase. It does not rewind September, and it does not promise a quiet December.
- Recheck variable-rate cards and lines after the next statements before treating the decision as cheaper credit.
- Keep new card spending, including seasonal buys, to what you can repay in one to two months, the limit Charlie Wise of TransUnion recommended.
- Watch the December signal. “If the Fed holds rates steady but keeps the door wide open to another increase this year, mortgage rates could face some upward pressure,” Jeff DerGurahian of loanDepot said.
