Fed Officials See Another Hike Coming, But No Sign as to When, Minutes Show
The Federal Reserve on Wednesday released minutes from its Sept. 15-16 policy meeting.
TL;DR
- Federal Reserve officials expect another interest rate hike before the end of 2027 to combat persistent inflation.
- The meeting minutes offer no specific date for the hike, stating decisions will depend on incoming economic data and risks.
- Core inflation was at 3% and headline inflation at 3.4% in August, both above the 2% target but lower than expected.
- Officials believe the labor market is close to maximum employment and economic growth has improved.
- 16 out of 18 FOMC officials submitted forecasts expecting one more rate increase in 2027.
- Market-based inflation indicators remain elevated, and consumer fears about future price increases are at their highest since May 2023.
- Rising Treasury yields are attributed to expectations of higher Fed rates, AI development, economic growth, and uncertainty related to Treasury buybacks.