Fed Holds Rates With Two Hawkish Dissents

The FOMC held rates steady on a 10-2 vote, with Lisa Cook and Beth Hammack dissenting in favor of another 25-basis-point hike after September's unanimous increase. Chair Kevin Warsh also said one 2027 meeting will focus solely on strategy, with no rate vote or policy statement, and two such meetings are expected in 2028.

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The Fed paused after September's hike, but two dissents for a further 25bp increase show a committee skewed toward tightening. Inflation has been above target for nearly six years, and Warsh flagged renewed energy-price pressure. Traders expect a December hike, which supports higher-for-longer rate pricing across Treasuries and rate-sensitive equities. The plan to drop votes and statements at some meetings reduces forward guidance, which could raise rate volatility, and one strategist called it "a dollar killer." Banks and rate-sensitive sectors face uncertainty over the path of policy and over communication.