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      FOMC Minutes Indicate Likely Rate Hike by Year-End

      The Federal Open Market Committee (FOMC) has indicated that most participants believe another interest rate hike will be appropriate by the end of 2026. The minutes from the recent meeting revealed that all members supported raising the federal funds rate to a range of 3.75% to 4.00%. Market expectations had previously priced in a 19% chance of a hike this month, with a full expectation for a December increase.

      Participants noted that risks in the labor market have diminished and are now broadly balanced, with a majority observing recent strengthening. However, inflation risks remain a concern, with many officials suggesting that the current policy rate is not restrictive enough to combat ongoing inflationary pressures. Staff estimates for August indicated a headline Personal Consumption Expenditures (PCE) inflation rate of 3.8% and a core rate of 3.4%.

      The minutes also highlighted that several officials are worried about the potential long-term effects of sustained high inflation on expectations and wage-setting. Additionally, the ongoing rise in energy prices could exacerbate broader price pressures. Despite these concerns, financial conditions are seen as supportive of economic growth, even with higher Treasury yields. The FOMC's unanimous vote reflects a consensus on the need for a cautious approach to future rate adjustments.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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