The Fed’s October 27–28 meeting could push annuity rates higher, after the Federal Reserve raised interest rates in September for the first time in more than three years. On September 16, 2026, the Federal Open Market Committee lifted its benchmark rate a quarter point, to a range of 3.75% to 4%. Minutes released since then show most officials expect another increase before year end.
- The September hike: the Fed raised its target range to 3.75%–4% by a 12–0 vote, citing inflation that “remains elevated.”
- More may come: the minutes say most officials expect another increase “by year end,” and the median projection for end-2026 is 4.1%.
- Annuity rates already moved: Treasury yields rose about 0.35 percentage point before the hike. Several carriers rated A- or better now offer guaranteed rates above 6% on terms of four years or longer.
- The buyer’s question: lock a rate now, or wait to see if October brings another hike.
What the Fed Did in September
WASHINGTON, Oct. 13, 2026. The Fed’s September 16 statement said the committee “decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent.” The vote was unanimous. The statement said the move would “support a timelier return to the Committee’s 2 percent goal” for inflation.
The meeting minutes fill in the picture:
- Inflation is running hot: total PCE inflation edged up to 3.8% in August, led by energy prices. Core PCE held at 3.4%.
- Bond yields jumped: Treasury yields rose about 35 basis points across 2- to 10-year maturities between the July and September meetings, driven largely by geopolitical news.
- Another hike is likely: most participants judged that another increase “would likely be appropriate by year end,” while saying each meeting remains open.
- Next decision: the committee meets again Tuesday and Wednesday, October 27–28.
Why the Fed Matters for Annuity Rates
The Fed does not set annuity rates directly. Insurers price multi-year guaranteed annuities (MYGAs) and fixed annuities from what they can earn on bonds, mostly investment-grade corporates and Treasuries. When the Fed raises rates and bond yields climb, insurers can afford to guarantee more.
That connection showed up quickly. As of October 12, the highest rates from carriers rated A- or better topped 6% for terms of four years and longer. Our guide to how annuity rates are set explains the full chain from Fed policy to your quote.
- MYGAs and fixed annuities: new-money rates tend to rise within weeks of higher bond yields.
- Immediate annuities: higher rates also raise SPIA payouts, so the same premium buys a bigger monthly check.
- Existing contracts: a MYGA you already own keeps its locked rate. Higher rates only affect new purchases and renewals.
What This Means for Annuity Buyers
If you are shopping now, the question is whether to lock today’s rate or wait for October 28. Nobody knows what the Fed will do, and insurers often adjust rates before a decision, not after.
- Locking now makes sense if: today’s rate already meets your income goal, or you would regret missing it if rates fall later.
- Waiting makes sense if: your money isn’t needed soon and you are comfortable that rates could just as easily hold steady.
- Splitting the difference: put part of your money in now and part later, or build an annuity ladder with staggered terms so you are never betting everything on one rate.
Rising rates are also a reason to check your insurer. A rate that sits well above the rest of the market from a lower-rated company carries extra risk. Stick with carriers rated A- or better, and compare offers on our best MYGA rates table.
We will update this article after the Fed’s October 28 decision with what it means for annuity rates.
Frequently Asked Questions
When is the next Fed meeting in 2026?
The Federal Open Market Committee meets Tuesday and Wednesday, October 27–28, 2026. The rate decision is announced on the second day.
Do Fed rate hikes raise annuity rates?
Usually, but not directly. Insurers set MYGA and fixed annuity rates from bond yields, and those yields tend to rise when the Fed raises rates. New annuity rates often move within weeks, sometimes before the Fed even acts.
Should I buy an annuity before or after the Fed meeting?
If today’s rate meets your goals, waiting adds risk without a guaranteed reward, because insurers often adjust rates ahead of a decision. Buyers who are unsure can split their money or ladder several terms so no single rate decision matters too much.
Related Reading
- Annuity rate trends: historical data and 2026 outlook
- Earlier this year: the Fed’s Q2 2026 rate outlook for annuity buyers
- What is a MYGA? Multi-year guaranteed annuity guide
