The Federal Reserve on Wednesday issued its Federal Open Market Committee statement, holding the federal funds rate at 3.75% to 4.00%. Two FOMC members voted for a 25 basis point hike, according to FXEmpire, a split that leaves the door open to another increase at the December 8–9 meeting.
Futures markets now price roughly an 80% chance of a hike in December, FXEmpire reported. The hold comes as inflation remains sticky and the labor market continues to run hot: Non-Farm Payrolls rose by 165,000 in October and the unemployment rate fell to 4.1%, according to FXEmpire. A strong economy normally argues against tightening, but with price pressures still present, it gives the Fed room to move.
The October inflation reports will land before the December meeting. FXEmpire lists forecasts of a 0.3% monthly rise in CPI, slowing from 0.6% in September, and a 0.2% rise in core CPI, down from 0.3% the month before. PPI is forecast to rise 0.4% on the month. Thursday's jobless claims will round out the labor picture; a continued low reading would reinforce the view that the economy is not slowing.
Markets have been under pressure. The Nasdaq Composite fell 3.37% last week and the S&P 500 lost 2.68%, according to FXEmpire, with technology stocks leading the decline as concerns grew about how AI data centers are being funded. Third-quarter earnings season is in its final stretch: 88% of S&P 500 companies have reported and blended Q3 earnings growth stands at 31.4%, according to FactSet as of November 6, 2026.
The AI trade gets two more tests this week. CoreWeave and Applied Materials report earnings, and both will be read as clues to whether data center spending is holding up through the tech pullback. As Gotrade put it in its market week ahead, "The main story right now is a retest of the AI trade," with investors asking how quickly heavy data center spending can turn into profit — even as the US economy remains strong and inflation has not fully cooled.
For American households, the immediate effect is that borrowing costs on credit cards, auto loans and mortgages stay where they are for now. The threat of a December hike means the cost of carrying debt is more likely to rise than fall into the new year. For small business owners weighing expansion or equipment purchases, the price of capital remains elevated, and the FOMC's two dissents signal that at least some policymakers believe rates are not high enough yet.
It is not yet known how the full FOMC statement characterized the balance of risks or whether it addressed the AI-driven investment boom directly. What is known is the vote count and the market's read on December. A CPI print that misses forecasts in either direction could move the odds sharply before the December 8–9 meeting, FXEmpire noted.
Our Take
Two dissents for a hike is not a hold — it's a warning shot. The Fed is telling anyone listening that 3.75% to 4.00% may not be the top, and the futures market heard it loud and clear at 80% odds for December. For families already squeezed by grocery bills and rent, that means the cost of money is not coming down anytime soon.
Notice what the Fed is doing while it waits: nothing. It is not cutting, not pausing with an eye toward relief, but sitting on a rate range that punishes savers less than it punishes borrowers. And the inflation forecasts — 0.3% CPI, 0.2% core — are not exactly a victory lap. Prices are still climbing, just more slowly.
The AI selloff is the other shoe waiting to drop. Wall Street poured billions into data centers on the promise of future profits, and now the Nasdaq is down 3.37% in a week while investors ask when the returns show up. If that retest fails and the labor market stays hot, the Fed gets exactly the excuse it needs to hike in December.
Watch the October CPI number. If it runs hot, the December hike is all but locked and the squeeze on Main Street continues. If it cools, the doves on the FOMC get a reprieve — but not a cut. Either way, the Fed is not riding to the rescue of anyone's budget this year. The question for Americans is simple: how much longer can households carry this weight while the Fed waits for inflation to finish the job on its own?
