Fed minutes: Most officials see another rate hike by year-end
Most Federal Reserve officials expect to raise interest rates again before the end of the year, minutes of their September meeting showed Wednesday. But the minutes gave no sign of when. The Wall Street Journal and CNBC both said officials made no urgent case for a hike at the next meeting, on Oct. 28.
Most Federal Reserve officials expect another interest rate hike before the year ends, according to minutes of their Sept. 15-16 meeting. The Fed released the minutes at 2 p.m. ET on Wednesday.
"Most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end," the minutes said, CNBC reported. Officials also said they go into each meeting "with an open mind" and will decide based on new data.
The minutes did not say when the next hike might come. The Wall Street Journal said officials did not make an urgent case for raising rates again at the next meeting, on Oct. 28. The meeting after that is Dec. 9.
At the September meeting, officials voted 12-0 to raise the key rate by a quarter point, to a range of 3.75% to 4%. It was the Fed's first hike since 2023. "Many participants" said a higher path for rates would be wise insurance against inflation staying above the Fed's 2% goal, the minutes said. Officials called the job market "close to maximum employment" and said growth had picked up.
Officials also talked about the jump in Treasury yields, which are near their highest levels since 2002, CNBC said. They tied the rise to expectations of higher Fed rates, the buildout of artificial intelligence and solid growth. Fed staff said some of it may come from uncertainty about the Treasury's plan to buy back older long-term bonds.
Much has changed since the meeting. The economy added only 29,000 jobs in September, far below forecasts. A key inflation gauge, core PCE prices, rose 3% in August from a year earlier, softer than expected. Since then, New York Fed President John Williams has said there is "no need for urgency" on the next hike, Reuters reported. Dallas Fed President Lorie Logan believes at least two more hikes will be needed to control inflation.
In September, 16 of the 18 officials who gave forecasts expected at least one more hike this year. Chair Kevin Warsh, who has led the Fed since May, did not submit a forecast.
For households, higher Fed rates tend to keep credit card, car loan and mortgage costs up. September consumer prices come out Oct. 14, before the Fed's next decision.
What we know: Most officials expect one more hike in 2026.
What we don't: Whether it comes in October or December.
Where outlets agree CNBC and The Wall Street Journal both report that the minutes show most officials expect another hike by year-end, without pointing to a specific meeting.
Where they differ New York Fed President John Williams sees "no need for urgency" on the next hike, while Dallas Fed President Lorie Logan believes at least two more hikes will be needed, Reuters reported.