The Fed report

highlights from The FOMC Policy Update
SEPTEMBER 17, 2026

Yesterday, the Federal Open Market Committee (FOMC) released its statement and held a press conference following the conclusion of its September meeting.

FOMC Policy Updates: Key Highlights

  • First interest rate hike since 2023. The FOMC voted unanimously to raise the target range for the federal funds rate by 25 basis points to 3.75-4.00% at its September meeting, marking the Fed’s first interest rate hike since July 2023.
  • Policy action consistent with market expectations. The Fed’s decision was in line with market expectations, as fed funds futures were indicating a greater than 90% probability of an interest rate hike at this meeting against the backdrop of persistently high inflation. The policy action was characterized as “support[ing] a timelier return to the Committee’s 2% [long run inflation] goal.”
  • Updated SEP released. The updated Summary of Economic Projections (SEP) highlighted a less divided Fed, as two thirds of Fed officials forecast one additional rate hike this year to 4.00-4.25%, with less dispersion in potential interest rate paths relative to the June SEP. Chairman Warsh once again abstained from providing a forecast.

notable commentary

  • “The plain fact is that inflation is too high and has been for too long.” As expected, much of the press conference discussion revolved around the price stability component of the Fed’s dual mandate. Chairman Warsh noted that “most advanced economies are facing price pressures” and that the FOMC is not “confident that underlying inflation is moving to [its] objective, clearly and at sufficient speed,” as recent PCE and CPI readings remained at stubbornly high levels.
  • “We removed a dose of accommodation.” Despite a prolonged backdrop of persistent inflation and geopolitical uncertainty, Chairman Warsh emphasized that the economy appears to be strengthening, as evidenced by a solid labor market, resilient domestic spending, and robust business capital investment and credit flows. He further characterized the FOMC as “hard-pressed to describe broad financial conditions as restrictive” and indicated that raising interest rates should more closely align financial and credit conditions with the Fed’s ultimate objectives.
  • “I am not in the forward guidance business.” Responding to questions as to whether this decision represents the first of a sequence of rate hikes, Chairman Warsh once again declined to provide forward guidance. He indicated that the FOMC had been considering the possibility of an increase for some time, ultimately choosing to hold rates steady at the June and July meetings to assess economic data trends throughout the first several months of his term as Fed Chairman. Despite his reluctance to provide forward guidance, the median SEP forecast indicates an additional rate hike this year, and fed funds futures are now pricing in a 100% probability of one rate hike and an approximately 25% probability of an additional rate hike by the end of the year.
  • Noticeably shorter press conference. Chairman Warsh’s press conference was noticeably shorter than those in recent history, clocking in at just under 30 minutes, as follow-up questions during the Q&A session were more limited than usual.

Market Reaction

  • A volatile afternoon session, yet again. Similar to the last several Fed decision days, financial markets were choppy, particularly during the press conference. The S&P 500 and Nasdaq Composite, which were up approximately 0.4% and 0.7%, respectively, prior to the Fed decision, sank approximately 1.4% during Chairman Warsh’s press conference before recovering some of the losses into the close. In the fixed income market, yield trends varied across the curve: the 2-year Treasury yield increased 7 basis points on the day to 4.74%, the 10-year Treasury increased 2 basis points to 5.02%, and the 30-year Treasury declined 1 basis point to 5.36%, as inflationary pressures had already largely been priced into the longer end of the curve.
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