Fed minutes: most officials saw another rate rise as likely by year end

The Federal Reserve published the minutes of its 15–16 September policy meeting on Wednesday 7 October. They show that most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by the end of the year.

At that meeting the Federal Open Market Committee raised the target range by 1/4 percentage point to 3-3/4 to 4 percent, by a 12–0 vote. Our brief on the decision covers the statement itself.

What the minutes add

According to the minutes, all participants supported the increase. Participants generally stressed that inflation remained elevated, that the labour market appeared to be near full employment, and that economic activity was expanding at a solid pace. Almost all of them judged that inflation risks were tilted to the upside, while risks to the labour market had diminished and were now broadly balanced.

Many participants described a higher path for rates as prudent on risk-management grounds, as insurance against inflation staying above the 2 percent goal. A couple of participants said they had raised their estimate of the neutral federal funds rate, and several said they saw the current policy rate as not restrictive or only mildly restrictive.

The minutes also note that participants approached each meeting with an open mind, and that future decisions would depend on incoming information.

Markets and the Treasury market

In the review of financial markets, the Fed’s markets staff reported that over the period between meetings the market-implied policy path, Treasury yields and equity prices all rose, and the dollar depreciated. Near-term inflation compensation rose, largely reflecting movements in oil prices, according to the minutes.

On the balance sheet, a few participants observed that Treasury markets had been functioning smoothly but stressed the importance of planning for market stress.

For traders

The minutes are a record of the September discussion, not a new decision. For readers holding positions overnight, rate expectations feed directly into financing costs; our guide to swap rates and overnight financing explains how.

What happens next

The committee’s next meeting is scheduled for Tuesday and Wednesday, 27–28 October 2026.