Fed Sees Likely Rate Hike Before Year’s End, According to Meeting Minutes

The Federal Reserve (Fed) may raise interest rates again before the end of the year. This is according to the minutes of its September 15-16 meeting, which the Fed released on Wednesday, October 7.

• A majority of participants considered that another increase in the reference rate would «probably be appropriate» before the end of the year.
• In September, the Fed already raised its rate by 0.25 points, to a range of 3.75% to 4%. The decision was unanimous: 12 votes in favor and none against.
• The next meeting is scheduled for October 27-28.

Why it matters: the Fed raises rates so that inflation returns more quickly to its 2% target. And according to the same minutes, the cost of borrowing has already risen moderately in most sectors in the weeks leading up to the meeting.

Why the Fed is considering another hike

According to the minutes, participants agreed that inflation remains high, while the labor market appears to be near full employment and the economy is growing at a solid pace.

• Almost all said that the risks to inflation are tilted upward, while the risks to employment are now balanced.
• Several participants said that the current rate does not slow down the economy, or only slows it down slightly.
• Many said that a higher rate would be insurance against inflation staying above the 2% target.

However, participants emphasized that they approach each meeting «with an open mind» and that their decisions will depend on new data.

How inflation is doing

Federal Reserve staff estimated that inflation, as measured by the personal consumption expenditures (PCE) price index, rose to 3.8% in August, driven by consumer energy prices. Excluding energy and food, inflation remained at 3.4%.

The good news: Federal Reserve staff expects total inflation to decrease for the rest of the year, as they predict that gasoline prices at stations will fall. But they do not expect inflation to reach the 2% target until 2029.

What it means for your wallet

The minutes indicate that residential mortgage rates have risen slightly more than the yield on 10-year Treasury bonds since the July meeting. Outside of mortgages, the cost of other consumer credit changed little.

• If you’re thinking of buying a house or taking out a loan, compare offers from several institutions before deciding.
• If you have variable-rate debt, such as many credit cards, check your statement to see what rate you’re paying and how it’s calculated.
• The Fed will announce its next decision at the end of its October 28 meeting.

Source: Federal Reserve, minutes of the Federal Open Market Committee on September 15-16, 2026 (October 7 statement).