Fed signals another rate hike before year-end

All 19 Fed officials supported raising the policy rate by 25 basis points to a range of 3.75–4.00%. Discussions surrounding the first rate hike since July 2023 highlighted concerns about renewed inflationary pressures and the resilience of the US economy.

According to the minutes, some officials noted that economic growth was gaining momentum, while many participants believed financial conditions continued to support economic activity despite rising bond yields. Strong stock market performance and low corporate bond risk premiums reinforced concerns that monetary policy might not be sufficiently restrictive. However, recent comments from Fed officials suggest there may be no urgency to raise rates again. Markets expect future interest rate decisions to depend on inflation and employment data.