The Federal Open Market Committee left the federal funds target range at 3-3/4 to 4 percent on Oct. 28, approving the hold by a 10-2 vote. Lisa D. Cook and Beth M. Hammack cast the two votes against, and both wanted a quarter-point increase rather than a cut. With the benchmark unchanged, no Fed move stands behind the yields on savings accounts and certificates of deposit this month.
The split is a hold with a lean toward tighter policy: ten members chose to stand still, and the only members who objected wanted rates higher. For people who rely on deposit interest, that means the benchmark did not fall, and it did not rise either. What a savings account, money market account or CD pays is set by each bank, so the practical question is what a bank is paying today, and what it will offer when a CD matures.
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A 3-3/4 to 4 percent range, unchanged on Oct. 28
In its post-meeting statement, the Federal Reserve wrote that “the Committee decided to maintain the target range for the federal funds rate at 3-3/4 to 4 percent,” saying the stance supports its dual mandate. The federal funds rate is the overnight rate banks charge one another, and the range is the Fed’s main lever on short-term borrowing costs across the economy.
The statement describes an economy the committee sees as running firm. It says “job gains have kept pace with the workforce, and the unemployment rate has changed little,” and that “economic activity is expanding at a strong pace.” On prices it is blunt: “Inflation remains elevated.”
The balance sheet language did not change course either. The committee said it “is continuing its policy of maintaining ample reserves in the banking system.” Together, the sentences describe a committee that saw no case to move in either direction on a majority basis, even as two of its voting members saw a case for going up.
Why Cook and Hammack wanted a quarter-point increase
The statement closes with the dissent: “Voting against the monetary policy action were Lisa D. Cook and Beth M. Hammack, who preferred to raise the target range for the federal funds rate by 1/4 percentage point at this meeting.” A quarter-point increase would have moved the range up by 0.25 percentage point, to 4 to 4-1/4 percent.
The statement records their preference without a separate explanation from either member. What it does say about the committee’s reading of inflation is that “the accumulation of more information will help the Committee determine the policy stance appropriate” to return inflation to its 2 percent goal, and it ends with the line “The Committee will deliver price stability.”
Two votes for a rise, and none recorded for a cut, is the part of the tally that matters most to savers. Nothing in the statement points toward lower rates, and the only disagreement it records ran toward higher ones.
What the Fed’s own administered rates did on Oct. 28
The Fed’s implementation note, issued the same day and effective Oct. 29, sets out the mechanics behind the range. The Board of Governors voted unanimously to keep the interest rate paid on reserve balances at 3.90 percent. That is the rate the Fed pays banks on the money they hold at the central bank, and it is the main tool for keeping the federal funds rate inside the target range.
The overnight reverse repurchase agreement rate stays at 3.75 percent, with a limit of $160 billion per day for each counterparty. The primary credit rate, also called the discount rate, stays at 4.0 percent, again approved unanimously by the Board. The note also directs the Fed’s trading desk to keep the federal funds rate between 3-3/4 and 4 percent.
Every one of those rates is unchanged. That is the full set of levers the Fed adjusted, or declined to adjust, on Oct. 28.
What a hold does and does not do to savings and CD yields
The Fed does not set what a bank pays a depositor. It sets the overnight rate banks lend to each other and the rates it pays or charges on its own facilities, and each bank, credit union and online lender then decides its own deposit rates. A hold gives those institutions no new instruction from the Fed to raise or lower what they offer.
That leaves the decision to the saver. A bank paying a low rate on a standard savings account has no reason from this meeting to pay more, and the committee’s choice to stand pat means there is no Fed-driven rise to wait for. A CD that is about to mature faces the same logic: the renewal rate is whatever the bank posts that day, not a number the Fed handed down.
The one thing the Oct. 28 decision does fix is the backdrop. The reserve rate banks earn at the Fed is 3.90 percent, and the reverse repurchase rate is 3.75 percent, so the Fed itself is paying rates in that neighborhood on money parked with it. A deposit account paying far less than those benchmarks is paying less than the central bank pays banks, which is a fair reason for a saver to compare offers rather than assume the account follows the Fed.
Is your savings account moving with the Fed, or standing still?
With the benchmark held on Oct. 28 and no cut or rise to react to, a savings account that pays next to nothing keeps paying next to nothing unless its owner moves the money. Every month of waiting is a month of interest not earned on cash that could be insured and earning more.
“Make Your Savings Pay You” is an 11-page guide to the safe places that pay more than a near-zero bank account, including high-yield savings for the cushion needed this year and Treasury bills from $100 that are free of state and local income tax. It also includes a worksheet for mapping where every dollar of cash sits today.
Get the safe-savings menu and the copyable ladder in the Make Your Savings Pay You guide →
This article was produced with AI assistance and edited for accuracy against the sources linked above.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
