Fed Holds Rates Steady in October: What It Means for Small Business Owners

The Federal Reserve left interest rates unchanged on October 28, 2026, keeping the federal funds target range at 3-3/4 to 4 percent, according to its FOMC statement. Prime was 7.00% going into the meeting. Here is what the decision means if you run a small business.

What the Fed decided

Rates on hold. The Federal Open Market Committee voted 10–2 to maintain the target range for the federal funds rate at 3-3/4 to 4 percent. Source: Federal Reserve FOMC statement, October 28, 2026.

Two members wanted a hike. Lisa D. Cook and Beth M. Hammack voted against the decision because they preferred to raise the target range by 1/4 percentage point. Source: same statement.

How the Fed described the economy. The statement said economic activity "is expanding at a strong pace," job gains "have kept pace with the workforce," and "inflation remains elevated." It said more information will help the Committee decide the policy stance needed to return inflation to its 2 percent goal. Source: FOMC statement.

Other Fed rates unchanged. The interest rate paid on reserve balances stays at 3.90 percent and the primary credit (discount window) rate stays at 4.0 percent, effective October 29, 2026. Source: Implementation Note, October 28, 2026.

What it means for the prime rate

The U.S. bank prime loan rate was 7.00% on every business day from October 15 through October 26, 2026, according to the Federal Reserve's daily series on FRED (DPRIME), and the Fed's H.15 Selected Interest Rates release showed the same 7.00% for the week ending October 22. Banks usually move prime when the Fed changes its target range. With no change on Wednesday, there is no Fed move for prime to follow. We will confirm prime in the next H.15 release.

What this means for business owners

• Variable-rate loans and lines. If your loan or line of credit is priced off prime, your rate should not change because of this decision.
• Don't plan around a cut. The Fed held rates, and two members voted to raise them. Nobody knows what the next meeting will bring, so price your funding on today's numbers.
• Fixed vs. variable. A fixed rate locks your cost. A variable rate moves with prime in either direction. Pick the one that fits how long you need the money and how much payment change you can handle.
• What to compare. Look at the margin over prime (for example, Prime + 1), any fees, the total cost over the life of the funding, the payment amount and how often it is due, and any prepayment terms. The headline rate alone does not tell you what you will pay.

How Pro Capital can help

Pro Capital — Funding Made Simple — places business owners with the right lender for their capital needs. Checking your options is free and has no credit impact. Term loans and lines of credit start at Prime + 1 and require a 680+ FICO score; lines of credit also need $8,000+ monthly revenue; and all of our funding products are unsecured. You can see today's prime rate on our rates page. To talk through your options, call (561) 444-7177 or apply online at www.getprocapital.com/apply.

This article is informational and not a commitment to lend. Figures come from the linked sources and may change. Rates and terms depend on the lender and your business profile.