Investment News · 29 October 2026 · 4 min read
In short: The US Federal Reserve kept its key interest rate at 3.75%-4% on 28 October 2026, its last meeting before the 3 November US midterm elections. It had raised rates by 0.25% in September. Two policymakers wanted another hike. Markets still see over 80% odds of a hike at the 8-9 December meeting. The rupee closed at ₹95.22 per dollar on Wednesday.
The numbers
| Item | Latest |
|---|---|
| US Fed rate | 3.75%-4% (unchanged) |
| US inflation (September) | 3.7% a year, above the 2% target |
| US jobs added (September) | 29,000; unemployment 4.2% |
| Next Fed meeting | 8-9 December 2026 |
| Rupee (28 Oct close) | ₹95.22 per US dollar |
| Nifty 50 / Sensex (28 Oct close) | 22,698 / 73,246 |
| Brent crude | About $111-115 a barrel |
Reuters-based reports said fewer officials dissented than markets feared, so some analysts read the decision as slightly ‘dovish’ (less tough). Fed Chair Kevin Warsh said financial conditions have tightened, but did not call them restrictive, according to a Morgan Stanley note. On the political side, President Trump has repeatedly criticised the Fed’s rate hikes, as ABC News reported. The Fed says it sets rates based on inflation and jobs data.
What it means for you
- Rupee and imports: Higher US rates tend to pull money towards the dollar. A weak rupee makes foreign travel, overseas education and imported goods costlier.
- Foreign investors: Foreign portfolio investors (FPIs) have sold close to $30 billion of Indian shares in 2026 so far, according to Kotak Neo. Higher US yields are one reason.
- NRIs: A weaker rupee means each dollar sent home buys more rupees.
- IT and pharma: These sectors earn in dollars, so they often react to Fed and US election news.
- SIP investors: Short-term swings around the Fed and the elections are normal. Avoid reacting to daily headlines.
What to watch next
The US votes on 3 November, with results expected over the following days. Then come two more rounds of US inflation and jobs data before the December Fed meeting. For background, read our earlier explainer on the Fed meeting, the midterms and Indian investors, and check what higher rates could mean for your loans with our EMI calculator.
Sources
- Raisin: Fed holds rates at 3.75%-4.00% (28 Oct 2026)
- Business Recorder (Reuters): Rupee eyes relief after Fed (29 Oct 2026)
- ABC News: Fed decision days before midterms
- Goodreturns: Stock market outlook, 29 October 2026
- Kotak Neo: FPI outflows in 2026 near $30 billion
This is a news summary for education, not investment advice. Figures are as reported on or before 29 October 2026; check official sources before making decisions.