Fed Minutes Hint to Another Hike This Year: Traders Don't See It Coming In October
Every Federal Reserve policymaker backed last month’s rate hike. Yet traders now see little chance of another hike in October. Minutes of the Sept. 15-16 Federal Open Market Committee (FOMC) meeting, released Wednesday, show a central bank united on raising rates and leaning toward another hike. “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. Why The Fed Hiked The minutes describe an economy running hotter than the Fed wants. Inflation, measured by the personal consumption expenditures (PCE) price index, rose to an estimated 3.8% in August. Core Personal Consumption Expenditures, which excludes food and energy, held at 3.4%. The Fed’s target is 2%. Officials pointed to three sources of pressure: oil prices pushed up by the Middle East conflict, past tariff increases and the artificial-intelligence buildout. Some participants warned that the AI buildout “could cause aggregate demand to outpace aggregate supply over the medium term,” the minutes said. In plain terms, companies are spending on data centers and chips faster than the economy can produce what they need, and that l
Every Federal Reserve policymaker backed last month’s rate hike. Yet traders now see little chance of another hike in October. Minutes of the Sept. 15-16 Federal Open Market Committee (FOMC) meeting, released Wednesday, show a central bank united on raising rates and leaning toward another hike.
“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. Why The Fed Hiked The minutes describe an economy running hotter than the Fed wants. 8% in August. 4%.
The Fed’s target is 2%. Officials pointed to three sources of pressure: oil prices pushed up by the Middle East conflict, past tariff increases and the artificial-intelligence buildout. Some participants warned that the AI buildout “could cause aggregate demand to outpace aggregate supply over the medium term,” the minutes said. In plain terms, companies are spending on data centers and chips faster than the economy can produce what they need, and that lifts prices.
Others worried about what years of high inflation do to behavior. After “more than five years of inflation above 2 percent,” some officials said, high price gains could start to shape inflation expectations and wage decisions. ” In other words, rates may still be too low to slow the economy. Read Also: Marvell Stock Is Up 230% This Year: Bank of America Sees a Further 40% Upside October Hike Odds Have Faded Markets had been pricing out an October move before the Fed minutes.
8% chance the Fed holds rates at its Oct. 2% chance of a hike. Those odds had already moved last week after a cooler-than-expected employment report. The minutes do not commit to a date.
” Chances for a hike in December remain as high as 70%. 772%. 286%. 668%, near its highest level since May 2002.
The minutes also addressed long-term yields. Officials said stronger economic data, expectations of heavy AI-related borrowing and geopolitics had pushed them higher. Many said financial conditions still support growth, with stocks up sharply this year and corporate bond spreads narrowing. 4%.
S. 4%. Read Also: Most Undervalued Chip Stocks In October 2026: Four Are Cheaper Than The S&P 500 Image: Shutterstock