The Federal Reserve delivered a hawkish 25 bps rate hike to a 3.75%–4.00% target range, in line with market expectations, signaling a "higher-for-longer" monetary stance through upwardly revised interest rate paths and upgraded economic projections.
FOMC Statement Highlights
- The Committee voted unanimously (12–0) to raise the benchmark rate by 25 basis points, marking the Fed's first rate increase in three years.
- Officials maintained that "inflation remains elevated" while explicitly dropping prior wording attributing price pressures to supply shocks, reinforcing policy accountability.
- The statement upgraded economic activity to expanding at a "solid pace," citing resilient domestic spending, strong productivity growth, and robust capital investment.
Summary of Economic Projections (SEP) Revisions
- The median target rate for end-2026 was raised to 4.1% (up from 3.8% in June), while the 2027 projection was hiked to 4.1% (up from 3.6%) which points to another rate hike this year.
- Real GDP growth for 2026 was revised upward to 2.3% (vs. 2.2% in June).
- The end-2026 unemployment rate projection was lowered to 4.1% (vs. 4.3% in June).
- 2026 PCE inflation was revised up to 3.7% (vs. 3.6% in June), with Core PCE raised to 3.4% (vs. 3.3% in June).
The Fed sees another interest rate hike this year along with slightly higher inflation and lower unemployment rate. Source: Fed
Almost all FOMC participants expect another interest rate hike this year. However, some of them see rate cuts next year. Source: Fed
The outcome is unambiguously hawkish. By lifting inflation forecasts and elevating the interest rate trajectory through 2028, the Fed signaled that policy will remain tight for an extended period. Consequently, the US Dollar (USD) surged following the release, driving EURUSD down to test the 1.1500 handle. Gold rapidly surrendered its pre-decision gains as real yield expectations adjusted higher, while stock indices (US500 as a S&P 500 futures) erased their earlier intraday bounce as markets re-priced a stricter Fed environment.
Yen loses ground after the BoJ decision
Hawkish remarks by BOJ Governor strengthen the yen – key takeaways
🏯Chart of the Day: Yen in a Trap. BoJ Hike That Weakened the Currency (18.09.2026)
Macro Calendar – Dovish BoJ Pivot and Key Data from Europe and the US
The material on this page does not constitute as financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other particular needs.
All the information provided, including opinions, market research, mathematical results and technical analyses published on the website or transmitted to you by other means is provided for information purposes only and should in no event be interpreted as an offer of, or solicitation for, a transaction in any financial instrument, nor should the information provided be construed as advice of legal or fiscal nature.
Any investment decisions you make shall be based exclusively on your level of understanding, investment objectives, financial situation or any other particular needs. Any decision to act on information published on the website or transmitted to you by other means is entirely at your own risk. You are solely responsible for such decisions.
If you are in doubt or are not sure that you understand a particular product, instrument, service, or transaction, you should seek professional or legal advice before trading.
Investing in OTC Derivatives carries a high degree of risk, as they are leveraged based products and often small movements in the market could lead to much larger movements in the value of your investment and this could work against you or for you. Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience, before trading, and if necessary, seek independent advice.