Most Fed Officials View Additional Rate Hike By Year-End Necessary, Minutes Show

03:49 PM EDT, 10/07/2026 (MT Newswires) -- Most Federal Reserve officials expected another interest rate hike by year-end to curb inflation, though they vowed to base their future policy decisions on fresh data, minutes from the central bank's September meeting showed Wednesday. In a unanimous vote on Sept. 16, the central bank's Federal Open Market Committee lifted its policy rate for the first time in just over three years as it sought to bring inflation down to its 2% target. The Fed's Summary of Economic Projections at the time signaling another hike later this year. "With regard to the outlook for monetary policy beyond the current meeting, most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end," according to the meeting minutes. Policymakers, however, stressed that future policy moves would depend on incoming information, along with its implications for the the balance of risks, the document showed. Near-term inflation expectations rose over the intermeeting period amid higher oil prices, with risks titled to the upside, according to the minutes. US consumers' year-ahead inflation outlook reached the highest in more than three years in September, while labor market expectations "mostly improved," a survey by the Federal Reserve Bank of New York showed Wednesday. Late last month, official data showed the Fed's preferred inflation metric at below market expectations in August as the government downgraded readings for July. The headline personal consumption expenditure price index rose 3.4% year over year in August, while the core measure, which excludes food and energy, stood at 3%. US job growth slowed more than projected in September, the Bureau of Labor Statistics said earlier this month. Following those numbers, markets ramped up bets for a Fed pause later this month. Interest rate traders now price in an 83% probability that the central bank will keep its benchmark rate steady on Oct. 28, compared with 62% a week ago and 54% a month earlier, according to the CME FedWatch tool. New York Fed President John Williams recently said that he expected monetary policy to get tighter, though he saw no urgency to act. "Many participants emphasized that a higher path for the target range would be prudent on risk management grounds, providing insurance against inflation remaining persistently above target due to stronger-than-expected demand or further adverse supply shocks," according to the meeting minutes. "Several participants stated that they viewed the current policy rate as not restrictive or only mildly restrictive." The minutes didn't offer a materially new policy signal, TD Economics said in a note. "The minutes contained relatively little that had not already been communicated through the September Summary of Economic Projections and (Fed Chair Kevin Warsh's post-meeting) press conference," TD Senior Economist Vikram Rai said.