Fed minutes point to another rate hike by year-end

Most Federal Reserve policymakers judged that another interest rate increase would likely be appropriate by the end of 2026, according to minutes released Wednesday from the central bank’s September meeting. The minutes do not set a date for another move, and officials said future decisions would depend on incoming information and its implications for the economic outlook and balance of risks. The Federal Open Market Committee unanimously approved a quarter-point increase at its September 15-16 meeting, lifting the federal funds target range to 3.75%-4%. It was the committee’s first increase since July 2023, according to the minutes. Participants cited inflation that remained elevated and economic activity expanding at a solid pace. Almost all judged inflation risks to be tilted upward, while labor-market risks had diminished and were broadly balanced. Many participants viewed a higher rate path as prudent insurance against inflation staying above the Fed’s 2% goal, including if stronger demand or further supply shocks kept price pressures elevated. Some warned that sustained inflation could affect expectations and become more entrenched in wage and price-setting decisions.