Most officials judged at least one more increase likely this year, but futures traders bet the Fed holds at its October meeting and waits until December.
The minutes. The Federal Reserve released minutes on Wednesday, Oct. 7, from its Sept. 15-16 meeting. They show most officials judged that another increase in the federal funds rate (the overnight bank borrowing rate that steers loan costs) would likely be appropriate by year end.
The September hike. At that meeting the Fed raised its target a quarter point to 3.75%-4%. It was the first hike in about three years, and every official backed it.
“In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion.”Fed Governor Michael Barr
The other camp. Others are slower to commit. Since the meeting, Vice Chair Philip Jefferson and New York Fed President John Williams have signaled they want more data first.
What next. The Fed meets again in late October. Futures traders give an October hold about 80.6% odds, per The Hill, and expect a hike in December.
Catch up
- Sept. 11 — August consumer prices rose 3.4% from a year earlier, with gasoline driving the monthly increase.
- Sept. 14 — Trump threatened to cut off trade with some nations unless the Fed lowered rates. The 10-year Treasury yield topped 5% for the first time since October 2023.
- Sept. 16 — The Fed raised rates a quarter point to 3.75%-4%, its first hike since July 2023. Trump demanded rates of "1%, or less."
- Sept. 22-24 — Chicago Fed President Austan Goolsbee said reaching 2% inflation would be "painful." Governor Michael Barr said more hikes were likely.
- Oct. 1 — August PCE inflation came in at 3.4%, below the 3.7% forecast, cutting October hike odds to 35%.
- Oct. 4 — Weak U.S. jobs data pulled back market bets on an October Fed hike.
9 earlier issues
- August inflation holds at 3.4% annually; gasoline drives monthly increase
- Consumer prices rose 0.4% in August and 3.4% over the year, lifting September Fed rate hike odds above 80%
- Trump threatens trade cutoff with some nations unless Fed lowers rates despite 3.4% inflation
- Update10-year Treasury yield hit 5.014% Monday, Sept. 14, first time since October 2023
- Federal Reserve is expected to raise its benchmark rate a quarter point on Wednesday, Sept. 16, its first hike in three years.
- UpdateFed raises its benchmark rate a quarter point to 3.75%-4%, its first increase since July 2023
- UpdateChicago Fed's Goolsbee says getting inflation to 2% will be 'painful' and require pushing employment below target
- Fed Governor Michael Barr says more rate increases are likely to counter inflation
- UpdateAugust PCE inflation was 3.4%, below the 3.7% forecast, cutting October Fed hike odds to 35% from 45%