๐ฅ September 2026 FOMC Meeting: Key Takeaways ๐
๐ The Fed hiked rates 25bp to 3.75%-4.00%, unanimously (12-0), citing solid economic growth and a push to accelerate progress toward the 2% inflation target.
๐ The dot plot shifted sharply hawkish: 2026-2027 median rate projections jumped to 4.00%-4.25%, with 16 and 14 members respectively backing further hikes, meaning 1-2 more hikes are possible this year and next before the rate path turns lower again, eventually moving toward a higher long-run rate of 3.25%.
๐ SEP forecasts show the Fed turning more hawkish across the board: 2026-2027 GDP raised to 2.3% and 2.4%, unemployment lowered to 4.1% (from 4.3%, below the long-run average), while inflation and core inflation were revised up to 3.7% and 3.4% (from 3.6% and 3.3%).
๐ Warsh said the economy is at full employment with no conflict between the Fed's dual mandate goals, called it hard to describe current financial conditions as restrictive, and pointed to resilient labor data, unresolved underlying inflation trends, and rising geopolitical risk as the three reasons behind the hike.
๐ The Fed reaffirmed its ample reserves policy after ending short-term bill purchases in August. Bank reserves hold steady near $2.99T, with TGA expected to approach $1T by September-October on corporate tax receipts against a year-end target of $850B, implying $100-200B of liquidity release to keep reserves supported.
๐ Markets read it hawkish: October hike odds jumped from 41% to 51% and 2026 three-hike odds rose from 28% to 39% on FedWatch, while the 10-year yield climbed above 4.74% and the 30-year held at 5.36%, the highest since July 2007.
#FedRateWatch
๐ The Fed hiked rates 25bp to 3.75%-4.00%, unanimously (12-0), citing solid economic growth and a push to accelerate progress toward the 2% inflation target.
๐ The dot plot shifted sharply hawkish: 2026-2027 median rate projections jumped to 4.00%-4.25%, with 16 and 14 members respectively backing further hikes, meaning 1-2 more hikes are possible this year and next before the rate path turns lower again, eventually moving toward a higher long-run rate of 3.25%.
๐ SEP forecasts show the Fed turning more hawkish across the board: 2026-2027 GDP raised to 2.3% and 2.4%, unemployment lowered to 4.1% (from 4.3%, below the long-run average), while inflation and core inflation were revised up to 3.7% and 3.4% (from 3.6% and 3.3%).
๐ Warsh said the economy is at full employment with no conflict between the Fed's dual mandate goals, called it hard to describe current financial conditions as restrictive, and pointed to resilient labor data, unresolved underlying inflation trends, and rising geopolitical risk as the three reasons behind the hike.
๐ The Fed reaffirmed its ample reserves policy after ending short-term bill purchases in August. Bank reserves hold steady near $2.99T, with TGA expected to approach $1T by September-October on corporate tax receipts against a year-end target of $850B, implying $100-200B of liquidity release to keep reserves supported.
๐ Markets read it hawkish: October hike odds jumped from 41% to 51% and 2026 three-hike odds rose from 28% to 39% on FedWatch, while the 10-year yield climbed above 4.74% and the 30-year held at 5.36%, the highest since July 2007.
#FedRateWatch
