FOMC Meeting Highlights: Fed Signals Another Hike In 2026; Warsh's Inflation Warning Triggers Equity Selloff
The outcome and Fed Chair Kevin Warsh's commentary could have significant implications for global bond yields, the US dollar, capital flows and emerging-market currencies and equities, including the Indian rupee and D-Street.
The US Federal Reserve's two-day policy ended with a 25 basis point hike on Wednesday, which would mark its first rate increase since July 2023. The central bank's decision to raise benchmark lending rates by 25 basis points came as no surprise to equity investors. The move was heavily priced into the market and aligned perfectly with the CME FedWatch tool, which had shown a 92.9% probability of a quarter-point hike heading into the meeting.
The Fed Chair noted that recent economic trends have shown little evidence that inflation is slowing to target levels, emphasizing that policymakers are focusing on broad trends rather than noisy individual data points. His comments indicated that the Federal Open Market Committee (FOMC) is preparing for a prolonged hawkish cycle, requiring persistent efforts to drag inflation back to its medium-term target of 2%.
The outcome and Fed Chair Kevin Warsh's commentary could have significant implications for global bond yields, the US dollar, capital flows and emerging-market currencies and equities, including the Indian rupee and D-Street.
Fed Rate Decision LIVE: Market Watch
Wall Street on Wednesday pared early gains to trade in red after Fed Chair Warsh warned that inflation continued to be too high and there was little evidence that it was slowing. Dow Jones falls nearly 700 points or 1.39% and S&P 500 slipped 0.76%. Nasdaq was also down 0.4%.
Fed Rate Decision LIVE: Key Highlights
- The Federal Reserve unanimously (12-0) raised the target federal funds rate by 25 basis points to 3.75%–4%, marking the first rate hike since July 2023.
- Expects only one more rate hike in 2026
- Fed Chair warned that inflation continued to be too high and there was little evidence that it was slowing.
- The Fed raised the Interest on Reserve rate to 3.9% and the discount rate to 4%, with median rate projections holding steady at 4.1% for both 2026 and 2027 while keeping the long-run neutral rate unchanged at 2%.
- Policymakers expect real GDP growth to reach 2.3% in 2026 and 2.4% in 2027
- Unemployment rate to remain flat at 4.1% in 2027
- Core PCE inflation is forecasted to fall from 3.4% in 2026 to 2.5% in 2027
- Inflation ultimately expected to return to the Fed’s 2% target by 2029.
Fed Rate Decision LIVE: Treasury 30-Year Yield Sinks
- The yield on 10-year Treasuries declined three basis points to 4.97%
- Germany’s 10-year yield declined three basis points to 3.51%
- Britain’s 10-year yield declined nine basis points to 5.30%
- The yield on 2-year Treasuries advanced two basis points to 4.69%
- The yield on 30-year Treasuries declined four basis points to 5.33%
Fed Rate Decision LIVE: Dollar Check
The dollar strengthened as Federal Reserve policymakers indicated another interest-rate increase for later this year after they raised on Wednesday in a widely anticipated move.
The Bloomberg Dollar Spot Index rose 0.3% in a third day of advances, making it the best three-day rally since June.
Fed Rate Decision LIVE: Traders Price In 50% Chance Of Rate Hike In October
According to Bloomberg, traders price in 50% chance of rate hike in October.
Fed Rate Decision LIVE: Fed To Create Taskforce To Deliver Report On AI
Warsh added that the Fed is closely monitoring artificial intelligence developments, expecting a dedicated taskforce to deliver a report on AI by year-end.
Fed Rate Decision LIVE: Warsh On Bond Yields
Federal Reserve Chair Kevin Warsh attributed the recent rise in bond yields to multiple factors, including a stronger economy, increased global competition for capital, and ongoing geopolitical pressures. He noted that the FOMC's latest rate action demonstrates how seriously the central bank is taking its mandate to tame inflation, though he expressed confidence that reaching price stability will not require damaging the labor market.
Fed Rate Decision LIVE: Wall Street Slips Into Red After Warsh Says Inflation Still Too High
Wall Street on Wednesday pared early gains to trade in red after Fed Chair Warsh warned that inflation continued to be too high and there was little evidence that it was slowing. Dow Jones falls nearly 500 points or 1% and S&P 500 slipped 0.40%. Nasdaq was also down 0.4%.
Fed Rate Decision LIVE: There Is Little Evidence That Inflation Is Slowing, Says Warsh
Federal Reserve Chair Kevin Warsh reinforced the Fed’s firm, unanimous decision to raise rates, citing a wide array of data pointing to a strengthening economy. Warsh noted that recent economic trends have shown little evidence that inflation is slowing to target levels, emphasizing that the central bank focuses on broad trends rather than noisy individual data points.
Fed Rate Decision LIVE: Not In Forward Guidance Business, Says Warsh
Finally, he emphasized that the Fed is no longer providing forward guidance and will not prejudge future monetary policy decisions.
Fed Rate Decision LIVE: Fed To Take Action To Prevent Isolated Price Changes, Says Warsh
Reaffirming the Fed's role in sustaining economic progress, Warsh stressed an unwavering commitment to full employment and price stability. Warsh acknowledged that while the Fed cannot target individual price spikes, it will take action to prevent isolated price changes from broadening across the economy.
Fed Rate Decision LIVE: Warsh On Inflation
Warsh warned that inflation remains too high and persistent, with too many categories still rising above 3%, reaffirming his and his colleagues' firm commitment to restoring price stability.
Federal Reserve Chair stated that the FOMC lacked confidence that inflation was moving toward its objective, noting that inflation risks remain tilted to the upside while labor market risks are balanced.
Fed Rate Decision LIVE: Labor Market In Good Shape, Says Warsh
Following the FOMC's move to remove a dose of monetary accommodation, Warsh emphasized that while the labor market remains in good shape, the central bank’s predominant focus is on price stability.
Fed Rate Decision LIVE: Fed Hard-Pressed To Classify Financial Conditions As Restrictive
Federal Reserve Chair Kevin Warsh signaled that the American economy is strengthening with robust credit flows, noting that he remains hard-pressed to classify current financial conditions as restrictive.
Fed Rate Decision LIVE: Warsh Begins Speech After 25 Bps Rate Hike
Fed Chair begins his speech after the FOMC announced a 25 basis points rate hike.
Fed Rate Decision LIVE: Market Check
After the rate decision, Dow Jones was trading 0.04% lower, while S&P 500 was up 0.34% and Nasdaq rose 0.7%.
Fed Rate Decision LIVE: First Rate Hike In Three Years As Kevin Warsh Starts Battling Inflation
The US Federal Reserve delivered its first interest rate hike in over three years, as the Kevin Warsh-led Federal Open Market Committee took its first major step to tame persistent inflation. Benchmark lending rates were raised by 25 basis points to 3.75–4%, matching market expectations.
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Fed Rate Decision LIVE: Productivity Growth Strong
"Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little," Fed said in a statement.
Fed Rate Decision LIVE: Economic Activity At A Solid Pace, Says Fed
"Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient," Fed said in its statement.
Fed Rate Decision LIVE: Interest On Reserve Rate Raised To 3.9%
The Fed raised the Interest on Reserve rate to 3.9% and the discount rate to 4%, with median rate projections holding steady at 4.1% for both 2026 and 2027 while keeping the long-run neutral rate unchanged at 2%.
Policymakers expect real GDP growth to reach 2.3% in 2026 and 2.4% in 2027, with the unemployment rate remaining flat at 4.1% over the same period. Meanwhile, Core PCE inflation is forecasted to fall from 3.4% in 2026 to 2.5% in 2027, with inflation ultimately expected to return to the Fed’s 2% target by 2029.
Fed Rate Decision LIVE: Can Expect Another Hike In 2026
The Federal Reserve’s updated summary of economic projections shows that the median FOMC forecast calls for one additional 25-basis-point rate hike in 2026, supported by 16 officials projecting at least one more increase this year.
Fed Rate Decision LIVE: Fed Delivers 25 Bps Rate Hike For The First Time Since 2023
The Federal Reserve unanimously voted to raise its benchmark interest rate by 25 basis points to a target range of 3.75% to 4%. As part of the policy tightening, the Fed also increased the Interest on Reserve (IOR) rate to 3.9% and the discount rate to 4%, stating that the rate hike will help facilitate a timelier return to its 2% inflation target.
Fed Rate Decision LIVE: Will There Be A Rate Hike?
Just minutes away from the final decision by the FOMC, while markets are expecting there to be 25 basis points hike lets wait for the final verdict. Stay tuned with us as we give live updates from the FOMC decision and Fed Chair Kevin Warsh's final speech.
Fed Rate Decision LIVE: How Will Markets React To Rate Hike Cycle?
The Fed is widely expected to hike interest rates on Wednesday, with HSBC forecasting an additional 25-basis-point increase in December. Though stocks may stumble initially, HSBC strategists expect the market to recover, keeping their year-end S&P 500 target at 8,100. Americas equity strategy head Nicole Inui noted that historical markets usually rebound three to six months after initial hikes during milder normalization cycles, such as in 1997 and 2016. While aggressive tightening can expose systemic cracks, like the 2000 dot-com crash and the 2006 housing slowdown, HSBC expects corporate and consumer balance sheets to remain resilient through the remaining 50 basis points of tightening.
Fed Rate Decision LIVE: What Else Are Investors Looking At?
Investors are also monitoring a wave of incoming data as the committee releases its updated Summary of Economic Projections (SEP). Beyond refreshed forecasts for GDP growth, unemployment, and inflation, the release features the dot plot of individual interest-rate expectations, which will extend to include projections for 2029 for the first time.
Fed Rate Decision LIVE: Where To Watch Fed Chair's Speech?
The Federal Reserve's September FOMC interest rate decision will be officially announced on Wednesday at 11:30 p.m. IST. After the announcement of the rate decision and monetary policy statement, Fed Chair Kevin Warsh will hold his post-meeting press conference at 12 a.m. IST.
The press conference will be streamed live on the social media handles of the Federal Reserve on platforms such as X and YouTube. NDTV Profit will also stream the FOMC press conference on its YouTube channel.
Fed Rate Decision LIVE: Rate Hike Expected For The First Time In Three Years
Financial markets now price in a over 90% chance that the Federal Open Market Committee will raise the overnight funds rate by a quarter percentage point to a 3.75%–4% range, according to CME Group's FedWatch tool. This represents a sharp shift from a month ago, when the odds stood at just 36% due to softer inflation expectations and market assumptions that Fed Chair Kevin Warsh would refrain from committing to a hawkish policy path.
Fed Rate Decision LIVE: What Are Analysts Saying?
Markets look well positioned to accept a Fed hike, according to Jim Baird at Plante Moran Financial Advisors. If anything, a decision to stand pat will raise more questions about what exactly the Fed is waiting for, he added.
History suggests that a transition from a prolonged pause to renewed tightening hasn’t necessarily derailed equity markets, said Adam Turnquist at LPL Financial.
Source: Bloomberg
Fed Rate Decision LIVE: Projections To Reveal How Many Hikes Could Take Place This Year
Economists in a recent Bloomberg survey expected officials to hold their outlooks for unemployment and inflation largely unchanged. Projections for rates should reveal how many expect additional hikes this year.
In the run-up to the Fed decision, data showed US retail sales rose by the most in five months in a broad advance, signaling consumers continued to spend despite higher gasoline prices.
Source: Bloomberg
Fed Rate Decision LIVE: Market Watch
- The S&P 500 rose 0.4% as of 12:30 p.m. New York time
- The Nasdaq 100 rose 0.8%
- The Dow Jones Industrial Average was little changed
- The MSCI World Index rose 0.4%
Fed Rate Decision LIVE: Gold Up 1%, MCX Silver Jumps Rs 3,300
Gold and silver prices surged follwoing a two-day dip as traders focused on a modest retreat in oil prices amid bets on the strong possibility of an interest-rate hike by the Federal Reserve on Wednesday.
Spot gold rose 1.38% to $4,353.34 an ounce at 9:22 pm IST, while silver advanced 1.48% to $64.6. Bullion prices jumped in India too as MCX October futures contract climbed 1.05% or Rs 1,589 to Rs 1,52,545 per 10 grams, while the MCX silver December futures advanced 1.45% or Rs 3,371 to Rs 2,35,489 per kg.
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Fed Rate Decision LIVE: Oil Prices Retreat
Oil retreated on signs that some of the recent supply outages in the Middle East are beginning to resolve and traders adjust positions after a blistering rally over recent sessions.
Brent slipped near $105 a barrel, and West Texas Intermediate dipped more than 3%, as Saudi Arabia seeks to return about half the capacity of its East-West pipeline within days following a shutdown last week because of drone strikes. Riyadh is also ramping up sales of crude from outside the Strait of Hormuz following the disruption. Libya, meanwhile, restored output to normal after outages at oil fields this week.
Source: Bloomberg
Fed Rate Decision LIVE: What Is the Dot Plot?
The dot plot displays the anonymous, individual interest-rate projections of FOMC participants. Each policymaker submits their estimate for the appropriate federal funds rate for the end of the current year, upcoming years, and the longer term. Introduced in 2012 to improve transparency, these projections reflect individual assessments based on current economic outlooks, not official policy commitments.
Fed Rate Decision LIVE: Warsh On Inflation
Speaking at the Jackson Hole symposium, US Federal Reserve Chair Kevin Warsh described the US labor market as resilient, noting that the 4.1% unemployment rate aligns with full employment. However, he expressed concern over inflation data and signaled hesitation regarding monetary policy, stating he would be "hard pressed" to view current financial conditions as restrictive.
Fed Rate Decision LIVE: How Will Rate Hikes Impact Tech Stocks?
While rate hikes typically hurt technology stocks, the downturn is usually short-lived, according to DataTrek Research. Historically, the Nasdaq, where tech accounts for roughly 60% of the index, dropped one month after rate hikes in five of the last six cycles, with losses deepening after three months in four of those instances. However, the index rebounded to positive territory within six months half the time, ranging from a 9.9% loss in 1994 to a 50.3% surge in 1999.
Fed Rate Decision LIVE: Gold Rises Over 1%
- West Texas Intermediate crude fell 3.8% to $101.76 a barrel
- Spot gold rose 1.3% to $4,346.40 an ounce
Fed Rate Decision LIVE: Bonds Update
- The yield on 10-year Treasuries declined four basis points to 4.96%
- Germany’s 10-year yield declined three basis points to 3.51%
- Britain’s 10-year yield declined eight basis points to 5.31%
Fed Rate Decision LIVE: Bitcoin Declines
- Bitcoin fell 0.3% to $75,613.79
- Ether fell 0.8% to $2,386.34
Fed Rate Decision LIVE: Dollar Check
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1537
- The British pound fell 0.2% to $1.3449
- The Japanese yen was unchanged at 155.10 per dollar
Fed Rate Decision LIVE: Market Watch
- The S&P 500 rose 0.4% as of 11:30 a.m. New York time
- The Nasdaq 100 rose 0.9%
- The Dow Jones Industrial Average was little changed
- The Stoxx Europe 600 rose 0.5%
- The MSCI World Index rose 0.4%
Fed Rate Decision LIVE: Will First US Rate Hike In Three Years Worsen D-Street's Selloff?
A higher Fed policy rate could push US Treasury yields further upwards. The US 10-year Treasury yield has already risen nearly 7% over the past month and was close to the 5% mark as of September 11.
US Treasuries are considered the global benchmark for risk-free returns and are widely used to price financial assets. As yields rise, investors can demand higher returns from riskier assets, including equities in emerging markets.
In case of India, this will likely create a potentially difficult combination of higher global funding costs and weaker foreign investor appetite. Foreign Institutional Investors have already sold more than Rs 14,400 crore worth of Indian equities over the past two weeks, adding to pressure on domestic benchmarks.
Fed Rate Decision LIVE: When And Where To Watch Fed Chair's Speech?
The Federal Reserve's September FOMC interest rate decision will be officially announced on Wednesday at 2:00 p.m. Eastern Time (11:30 p.m. IST). After the announcement of the rate decision and monetary policy statement, Fed Chair Kevin Warsh will hold his post-meeting press conference at 2:30 p.m. ET (12 a.m. IST on Sept. 17).
The press conference will be streamed live on the social media handles of the Federal Reserve on platforms such as X and YouTube. NDTV Profit will also stream the FOMC press conference on its YouTube channel.
Fed Rate Decision LIVE: Markets Expect 92% Probability Of Rate Hike
Markets are estimating a 25-basis-point rate hike on Wednesday with a 92.5% probability, according to the CME FedWatch tool. Investors are also assigning a 45% probability to another quarter-point hike at the Fed's October meeting and a 30% probability of a December hike. The current interest rate stands at 3.5%-3.75%.
Fed Rate Decision LIVE: Could It Be A Start To New Hiking Cycle?
Single rate hikes are an anomaly for the Federal Reserve; its last true "one-and-done" increase occurred back in March 1997. Ahead of Wednesday's decision, Morgan Stanley Chief US Economist Michael Gapen expects another rate hike, arguing that stubborn inflation isn't slowing fast enough to assure policymakers that price growth will hit their 2% target on schedule.
Fed Rate Decision LIVE: FOMC's Second Day Of Meeting Begins
The Fed wraps up its two-day policy meeting today, with traders widely anticipating a 25 bps rate hike. According to CME’s FedWatch tool, the likelihood of an increase sits at 92.7%, barely nudging from 93.5% a day ago.
Fed Rate Decision LIVE: S&P 500 To Tumble 10% After Fed Hike?
A possible interest rate hike by US Federal Reserve on Wednesday could result in a correction in the S&P 500 as lower corporate margins weigh on profit outlooks and markets prepare for a tightening policy, Bloomberg News reported citing Macro Risk Advisors LLC.
The S&P 500 has fell around 1% in September so far, its weakest month historically, amid concerns over higher energy costs and latest inflation data that has pushed US 10-year Treasury yields over 5% for the first time since 2023. Following this development, traders expect a quarter point rate increase by Fed Chairman Kevin Warsh on Wednesday, with CME's FedWatch tool estimating more than 92% chance of an interest-rate hike.
A rate hike on Wednesday could result in more pain, the news portal reported citing Dean Curnutt, CEO and founder of Macro Risk Advisors.
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Fed Rate Decision LIVE: Goldman Sachs Changes Its Call
Goldman Sachs has reversed its call on the US Federal Reserve and now expects the central bank to raise interest rates by 25 basis points in its September meeting, Reuters reported, quoting the brokerage in a note on Friday.
The investment bank had previously expected the Fed to keep rates unchanged. Its latest forecast comes as markets price in a high probability of a rate hike and policymakers are seen as unlikely to surprise investors with a pause.
Goldman Sachs said the shift in its forecast was driven primarily by market pricing rather than a significant change in its economic outlook, Reuters reported.
The brokerage also said the recent surge in oil prices could make some policymakers more inclined to support additional tightening.
The revised call follows stronger-than-expected US producer price data and a surge in oil prices above $100 a barrel, which have renewed concerns about inflation.
Fed Rate Decision LIVE: When And Where To Watch Kevin Warsh's Speech
Following the announcement of the rate decision and monetary policy statement, Fed Chair Kevin Warsh will hold his post-meeting press conference half an hour later at 2:30 p.m. ET (12 a.m. IST on Sept. 17).
The press conference will be streamed live on the social media handles of the Federal Reserve on platforms such as X and YouTube.
NDTV Profit will also stream the FOMC press conference on its YouTube channel.
Fed Rate Decision LIVE: Macquarie Highlights Diplomatic Balancing Act
Thierry Wizman and Gareth Berry, global macro strategists at Macquarie, highlighted the diplomatic balancing act facing the central bank chief. "Kevin Warsh has a conundrum," they wrote in a research note. They explained that Warsh must weigh political appeals for lower borrowing costs against internal committee sentiment favouring a rate hike, concluding that Warsh is likeliest to "go with the internal flow and accede to the majority's wishes for a hike".
Beyond the rate verdict itself, investors will scrutinise the Fed's updated Summary of Economic Projections and "dot plot" chart for vital clues regarding projected interest rate trajectories.
Fed Rate Decision LIVE: What Analysts Have To Say
Prominent market analysts emphasise that stronger economic indicators have constrained the central bank's room to manoeuvre. Stephen Juneau, senior US economist at Bank of America, noted that Chair Kevin Warsh "kind of boxed himself into where the data needed to be very soft for the Fed not to follow through with a hike", reported Reuters.
Fed Rate Decision LIVE: Commodities Check
- West Texas Intermediate crude fell 1.9% to $103.79 a barrel
- Spot gold rose 1.1% to $4,340.66 an ounce
Fed Rate Decision LIVE: Bonds Decline
- The yield on 10-year Treasuries declined two basis points to 4.98%
- Germany’s 10-year yield declined one basis point to 3.53%
- Britain’s 10-year yield declined seven basis points to 5.31%
Fed Rate Decision LIVE: Bitcoin Falls Marginally
- Bitcoin fell 0.2% to $75,746.42
- Ether fell 0.1% to $2,402.57
Fed Rate Decision LIVE: Currency Check
- The Bloomberg Dollar Spot Index was little changed
- The euro was little changed at $1.1534
- The British pound fell 0.2% to $1.3452
- The Japanese yen was little changed at 155.17 per dollar
Fed Rate Decision LIVE: Dow, Nasdaq Rise As Traders Shrug Off Hike Jitters
Dow Jones rose 0.05% to 52,115.35, while S&P 500 was up 0.24% to 7,604.17. Tech heavy Nasdaq also rose 0.43% to 26,093.60 minutes after open.
Fed Rate Decision LIVE: Bonds Under Pressure
Despite the firmer futures, macroeconomic risks remain significant. Crude oil prices are holding above $100 a barrel, with Brent crude futures down 0.7% at $107.92 a barrel and West Texas Intermediate futures down 1.2% at $104.55. At the same time, Treasury yields have surged on expectations of persistent inflation. The 10-year US Treasury yield was slightly above 5%, while the 30-year yield stood at 5.374%.
Higher bond yields increase the return available from relatively safer assets and can put pressure on equity valuations, particularly when inflation remains above the Fed's comfort zone.
Fed Rate Decision LIVE: Markets Looking For Clarity
Investors may be positioning ahead of greater clarity on the Fed's rate path.
While a 25-basis-point hike is largely priced in, uncertainty remains over what comes next. Markets are currently assigning a 45% probability of another hike in October and 30% in December.
The Fed's statement and Chair Kevin Warsh's guidance will therefore be closely watched for signals on whether Wednesday's move is a one-off adjustment or the beginning of a sustained tightening cycle. A clearer outlook could help reduce some of the uncertainty currently weighing on risk assets. Investors are likely to focus not only on the rate decision but also on the Fed's assessment of inflation, economic growth and the trajectory of future policy.
Fed Rate Decision LIVE: US Futures Indicate Positive Start
US stock futures edged higher on Wednesday despite growing expectations that the Federal Reserve will raise interest rates, potentially marking the beginning of a new rate-hiking cycle over the coming months. S&P 500 futures were up 0.2%, while Nasdaq-100 futures gained 0.4%. Futures linked to the Dow Jones Industrial Average climbed 77 points, or 0.2%, ahead of the Fed's policy decision.
Fed Rate Decision LIVE: FOMC Likely To Press Hike First Time In 3 Years
The US Federal Reserve's two-day policy meeting is underway, with markets bracing for a closely watched decision on interest rates. The Fed is widely expected to deliver a 25 basis point hike on Wednesday, which would mark its first rate increase since July 2023.
While the rate hike is largely priced in, investors will turn their focus to the Fed's updated economic projections and “dot plot” for clues on the pace and extent of further tightening. Persistent inflation, elevated energy prices and geopolitical tensions have complicated the outlook, keeping the risk of higher-for-longer rates firmly in focus.
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