Most FOMC Participants See Another Rate Increase Likely in 2026, Fed Minutes Show
MT newswire2026/10/07 18:3802:38 PM EDT, 10/07/2026 (MT Newswires) -- After raising the target range for the federal funds rate at its Sept. 15-16 meeting, most Federal Open Market Committee participants judged that another increase would likely be appropriate by year end, minutes released Wednesday showed. Participants emphasized that they approached each meeting with an open mind and that future decisions would depend on incoming data and the balance of risks. The committee voted 12-0 to raise the target range to 3.75% to 4%, saying inflation remains elevated and that the move would support a timelier return to its 2% goal. The Summary of Economic Projections suggested a further rate increase is possible in 2026, followed by no adjustment in 2027 before a reduction in 2028. Nearly half of participants indicated one more increase may be needed in 2027, meaning the median could shift at the next update. Many participants said a higher policy path would be prudent on risk-management grounds, providing insurance against inflation remaining above target due to stronger-than-expected demand or further supply shocks. A couple noted that higher rates would help prevent energy- and AI-related price pressures from broadening. Several participants viewed the current policy rate as "not restrictive or only mildly restrictive."
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