Interest rates
The Fed may raise rates in December. Here's what it does to your credit card
By the newsroom · · 2 min read · ▶ 0:44
The essentials
- The Federal Reserve kept the overnight funds rate in a range between 3.75%-4%.[1]
- Two of the 12 FOMC voters dissented, and both wanted the committee to raise rates by a quarter percentage point.[1]
- After Warsh's press conference, December rate hike odds sat roughly around 82%.[2]
- A quarter percentage point rate hike by the Fed will likely cause a 0.25% increase in your credit card interest rate.[3]
What happened
The Federal Open Market Committee approved its statement by a 10 – 2 vote.[4] The Federal Reserve kept the overnight funds rate in a range between 3.75%-4%, where it has been since a quarter percentage point increase in September.[1] The two dissenters were Governor Lisa Cook and Cleveland Fed President Beth Hammack, both of whom wanted a quarter percentage point increase.[1] "Inflation remains elevated," the statement said.[4] Prior to the decision, traders had priced in roughly 88% odds of a 25 bps rate hike for December.[2] After Warsh's press conference, that sat roughly around 82% odds.[2] Warsh has avoided providing so-called forward guidance about the FOMC's intentions.[1]
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What the video doesn't say
This was Cook's first dissent since joining the Fed in 2022.[1] Inflation has been above the Fed's 2% target for more than five years.[1] An Atlanta Fed tracker is pointing to 3.4% annualized growth in the third quarter.[1] Most credit card issuers add several percentage points to the prime rate to make their cards' interest rates.[3] It could take consumers one to two billing cycles to see a Fed increase reflected in their credit card APRs.[3] Cardholders who carry a balance month to month can expect higher credit card bills.[3]
What's next?
The Nonfarm Payrolls report for October is due on Friday, November 6, at 8:30 a.m. ET.[5] The U.S. is expected to have added 55,000 jobs in October, with the unemployment rate holding steady at 4.2%, per FactSet.[5]
Sources
- 1Fed holds rates steady despite concerns over inflationCNBC · October 28, 2026
- 2Much ado about nothing? Fed chair Warsh talks up a storm but December rate hike bets barely budgeinvestingLive · October 29, 2026
- 3Fed's latest rate hike means credit cardholders can expect higher bills this spring and summer, warns expertCNBC · March 18, 2022
- 4Federal Reserve issues FOMC statementBoard of Governors of the Federal Reserve System
- 5Midterms, Apple earnings, jobs report. Wall Street faces a big week ahead just as investors dump techCNBC · October 30, 2026
Photos: G. Edward Johnson (CC BY 4.0). Cropped.
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