Market News / Story
Minutes of the Federal Open Market Committee
federalreserve.gov ·
A joint meeting of the Federal Open Market Committee and the Board of Governors of the Federal Reserve System was held in the offices of the Board of Governors on Tuesday, September 15, 2026, at 10:30 a.m. and continued on Wednesday, September 16, 2026, at 9:00 a.m. Developments in Financial Markets and Open Market Operations The manager started with an overview of developments in financial markets over the intermeeting period. Asset prices were affected by economic data that pointed to a resilient economy with persistent inflation, an escalation of geopolitical tensions that pushed up energy prices, and policy communications. The market-implied policy path, Treasury yields, near-term inflation compensation, and equity prices all increased, and the dollar depreciated. Regarding expectations for U.S. monetary policy, the manager noted that the market-implied path for monetary policy had risen notably over the intermeeting period and that both market prices and market outreach indicated that investors placed high odds on a 25 basis point increase in the target range for the federal funds rate at the September meeting. Responses to the Open Market Desk Survey of Market Expectations (Desk survey) also indicated that a considerable probability was placed on at least 25 basis points of policy firming by the end of the year. The shift in expectations was attributable in part to FOMC communications as well as to the incoming inflation data. The manager also observed that considerable uncertainty remained about the path of policy at longer horizons. The manager turned next to the Treasury market. Nominal yields increased around 35 basis points across the 2- to 10-year segment of the yield curve. Part of the increase reflected the higher expected path of monetary policy and the strength of economic data. Market commentary pointed to geopolitical developments, uncertainty related to the U.S. Treasury's announcement and imple FED MINUTES: MOST OFFICIALS SEE ANOTHER RATE HIKE BY YEAR-END All Fed participants backed Septembers 25bp rate hike, while most judged another increase would likely be appropriate by year-end, minutes show. Almost all saw inflation risks tilted to the upside, with some warning the AI investment boom could push demand beyond supply and add inflation pressure. Officials generally viewed the labor market as near full employment, while financial conditions remained supportive despite higher Treasury yields. Several Fed officials viewed the current rate as not or only mildly restrictive