Fed minutes show most officials expect another rate hike by year end
Most Federal Reserve officials expect to raise interest rates again before the end of the year, minutes of the September meeting released Wednesday show, but they gave no hint of when. The 10-year Treasury yield touched its highest level since 2002 earlier in the day.
AI-assisted · US Brief desk · Sources listed below
What happened
Most Federal Reserve officials expect to raise interest rates again before the end of the year, according to minutes of the Sept. 15–16 policy meeting released Wednesday. The minutes did not say when. The Fed's next rate decisions are due Oct. 28 and Dec. 9.
At that meeting, the Fed voted unanimously to raise its benchmark rate by a quarter point, to a range of 3.75% to 4%. Officials said inflation was still elevated while the job market looked close to full employment. Almost all said the bigger risk was inflation running hot, while job-market risks had eased. Fed staff tied higher prices mostly to past tariff increases, energy costs linked to geopolitical events and AI-driven demand for tech goods.
"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. Officials added that they approach each meeting "with an open mind." Several said they did not see current rates as restrictive, or only mildly so, and many described a higher path as insurance against inflation staying above the Fed's 2% target.
Why it matters
Treasury yields help set borrowing costs such as mortgage rates. The 10-year yield touched 5.35% Wednesday, its highest since 2002, before easing to about 5.29% after a strong $39 billion auction of 10-year notes. The minutes show officials linked rising yields to expectations of higher Fed rates, the AI build-out and solid growth. Fed staff said some of the jump may reflect uncertainty over the Treasury Department's debt buyback program.
What’s next
The Treasury sells $22 billion of 30-year bonds on Thursday and holds a buyback of at least $4 billion the same day. The Fed's next rate decision is Oct. 28.
More context
Chair Kevin Warsh, who took the job in May, told reporters after the meeting that the hike removed "a dose of accommodation," a phrase Wall Street read as a sign more increases could follow, CNBC reported. Of the 18 officials who submitted forecasts, 16 expected another hike this year. Warsh has not submitted a forecast.
An October move looks less likely, though. Several officials have since said the Fed does not need to rush, and the Fed's preferred inflation gauge came in cooler than expected for August, at 3% for core prices and 3.4% overall, partly because of changes in how some inputs are calculated, according to CNBC. A New York Fed survey out Wednesday found consumers' fears about price increases over the next year at their highest since May 2023.
5 listed sources
- Federal Reserve, Oct 7, 2026: Minutes of the Federal Open Market Committee, September 15-16, 2026
- Federal Reserve, Oct 7, 2026: FOMC minutes, full text
- CNBC, Oct 7, 2026: Fed officials see another hike coming, but no sign as to when, minutes show
- CNBC, Oct 7, 2026: 10-year Treasury yield backs off from 24-year high after solid bond auction
- Sourcing note: Quotes and the vote are from the Fed's own minutes. Market figures, inflation data and the forecast count are from CNBC. No partisan lean. Related US Brief: India raises interest rates for the first time since 2023 as oil pushes up inflation.
References listed by US Brief; a source count is not a verification score.
Editorial sourcing notes
The hero photo shows an earlier FOMC meeting (April 2016), not the September 2026 meeting. Treasury yields and auction results are intraday figures reported by CNBC around midday ET and may have moved. The August inflation figures and the 16-of-18 forecast count are as reported by CNBC.
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