Fed raised rates 25bp in September — the first hike in three years and in line
with market expectations. The vote was unanimous (July was 9-3). The dot plot
shows a median of two 25bp hikes in 2026 and no hikes in 2027, hawkish versus
June projections (June showed one 2026 hike and a 2027 cut) but dovish versus
pre-meeting market pricing that had priced four cumulative hikes by June 2027.
The upgraded Fed GDP forecasts for this year and next and raised this year’s
headline and core inflation forecasts. Unemployment forecasts for 2026-28 were
revised lower. The statement said the hike will help bring inflation back to the
2% target “more timely.”
