Fed Minutes: Unanimous September Hike, Most See Another by Year-End

The Federal Reserve on Oct. 7 at 2 p.m. ET released the minutes of its Sept. 15⁠–⁠16 meeting, where it raised the federal funds rate by 25 basis points to 3.75⁠–⁠4.00%. The decision was unanimous, and most officials judged that another increase would likely be appropriate by the end of 2026.

The details

The decision. All participants supported the hike, and none of the 12 voting members dissented — a group that includes Chair Kevin Warsh and Jerome Powell. Interest on reserve balances was lifted to 3.90%.

What comes next. According to the minutes, most participants assessed that "another increase in the target range for the federal funds rate would likely be appropriate by year end." Several said they viewed the current policy rate as "not restrictive or only mildly restrictive" even after the September move. Officials stressed that they approach each meeting with an open mind and will decide based on incoming data.

Inflation. Participants generally saw inflation risks as skewed to the upside, and some said those risks had grown in recent months. Fed staff estimated that PCE inflation rose to 3.8% year over year in August, with core PCE steady at 3.4%. Many participants described a higher rate path as risk-management insurance against inflation staying persistently above the 2% target amid strong demand and further supply shocks, notably elevated oil prices.

The AI buildout. Several participants noted that the scale and pace of AI infrastructure spending keep surprising to the upside, and some warned it could push aggregate demand ahead of supply over the medium term, adding to price pressures.

Economy and markets. The staff outlook for growth and the labor market improved from July. Participants saw the labor market as close to maximum employment, with balanced risks. Despite higher long-term yields — up about 35 basis points across the 2- to 10-year segment between meetings — many participants viewed financial conditions as supportive of growth. A few suggested strengthening the Fed's tools for Treasury market stress in advance, even though the market is functioning smoothly.

What it means for markets

The minutes confirm a hawkish stance. Traders see little chance of a move at the Oct. 27⁠–⁠28 meeting — 16.5% for a hike on Polymarket — but price a 74.5% chance of another 25 bp increase by December. Higher policy rates and Treasury yields tend to weigh on risk assets, Bitcoin included; see our story on the 10-year Treasury yield hitting its highest level since 2002.

When the minutes came out, Bitcoin was trading near $83,400, down 2.7% over 24 hours on Binance; the decline began before the release. For the latest on price, derivatives and Polymarket odds, see the daily brief and our Bitcoin page.