Fed meeting live updates: Fed interest rate decision looms, with traders anticipating first hike in 3 years

LIVE Fed meeting live updates: Fed interest rate decision looms, with traders anticipating first hike in 3 years Grace O'Donnell · Editor, Special Projects Updated Wed, September 16, 2026 at 7:50 PM GMT+2 1 min read CME The Federal Reserve's September policy meeting kicked off Tuesday morning, and markets overwhelmingly expect the Fed to raise interest rates by 25 basis points on Wednesday amid persistently high inflation. Such a move would mark the Fed's first increase in the fed funds rate since 2023, when the Jerome Powell-led central bank concluded its post-pandemic hiking campaign. However, inflation has now remained above the Fed's 2% target for more than five years, with the war in the Middle East serving as the latest driver of higher prices.

As Fed Chairman Kevin Warsh said in his Jackson Hole Symposium speech in August, "We have work to do. " Still, a hold isn't entirely off the table — even as traders price in a 92% chance of a Fed rate hike, according to CME Group's FedWatch tool . Federal Reserve Chairman Kevin Warsh has been adamant about not providing markets with forward guidance on interest rate decisions, preferring that officials have a "good family fight" over the data at FOMC meetings.

In addition to the intrigue over whether the Fed will hike rates, markets will closely scrutinize the Fed's Summary of Economic Projections, the so-called dot plot , for clues about monetary policy in the next few years. LIVE 24 updates 10 mins ago Grace O'Donnell Why BofA's Stephen Juneau expects 3 rate hikes this year The Fed's interest rate decision today could be the beginning of a new rate-hiking cycle, Bank of America contends. BofA Securities senior US economist Stephen Juneau told Yahoo Finance on Tuesday that he expects the Fed to raise rates on Wednesday, followed by additional 25 basis point rate hikes in October and December.

"They're basically going to undo what they did last year," Juneau said. "Last year was about taking out insurance cuts for the weakness they were seeing on the labor market. This year is about taking out insurance for the upside risk to inflation and reversing those.

And then they'll wait and see how the inflation data evolves. " The market sees a chance of several more rate hikes ahead this year. Traders are pricing in 25% odds of Juneau's base case of three rate hikes by December, according to CME FedWatch.

There's roughly a 50% chance of two rate hikes, fed fund futures indicate, and a 22% probability of the Fed hiking by just 25 basis points this year priced in. 25 mins ago Jennifer Schonberger 'Case for a rate hike is strong': Deutsche Bank economist Wall Street is largely expecting the Federal Reserve to raise interest rates this afternoon for the first time in more than three years. Investors are betting on a nearly 93% chance the central bank raises rates by a quarter point to a new range of 3.

75%-4%. "The case for a rate hike is strong," said Matt Luzzetti, chief US economist for Deutsche Bank, pointing to solid economic growth, a rebound in the job market, and inflation that's shown limited evidence of falling back toward the Fed's 2% inflation goal. Inflation readings over the summer have shown some progress, but still suggest prices are stubbornly sticky, as oil climbs back over $100 a barrel a mid renewed tensions in the Middle East.

"Forward-looking indicators, including from energy prices, suggest the inflation overshoot is likely to persist for some time," he said. "Against this backdrop, it is not clear the Fed is sufficiently restrictive. " Read more.

46 mins ago Grace O'Donnell Why getting a Fed rate hike today could be a 'nothing burger' Options market pricing suggests that today's Fed decision will be "relatively business as normal," according to RBC Capital Markets head of derivatives strategy Amy Wu Silverman. The options market breakeven price isn't "abnormal" relative to history, Silverman told Yahoo Finance on Wednesday. "I think what is priced in today is sort of a nothing burger at this point," she added.

Investors will be scouring the Fed's policy statement, dot plot, and Fed Chairman Kevin Warsh's press conference remarks for signs of nuance. "It's really going to come down to what Kevin does or does not say," Silverman said. If the Fed hikes rates, will it be a "dovish hike?

" How will the Fed alter its outlook for interest rates for the coming years? These are all questions that markets will have to wait and see on, Silverman noted, "but the actual pricing isn't suggesting that it's going to be out of left field. " Today at 4:34 PM UTC Grace O'Donnell Stocks are cautiously rising ahead of the Fed decision Stocks are rising ahead of the Fed's decision today, with a rate hike almost entirely being priced in.

The Dow Jones Industrial Average ( ^DJI ) wavered near the flat line, while the S&P 500 ( ^GSPC ) rose 0. 3% and the Nasdaq Composite ( ^IXIC ) gained 0. 7%.

The small-cap-weighted Russell 2000 ( ^RUT ) also rose 0. 5%. "I do think that if we do if we get the expected rate increase, it'll be a bit of a relief rally for the markets," Goldman Sachs Asset Management small-cap portfolio manager Greg Tuorto told Yahoo Finance.

Treasury yields eased, with the 10-year yield ( ^TNX ) falling below 5% and the 30-year yield ( ^TYX ) declining by 3 basis points. In recent weeks, bond yields have sharply risen, driven in large part by expectations of higher interest rates. Follow more live markets cove rage.

Today at 3:19 PM UTC Grace O'Donnell 3 global central bank decisions this week could indicate changing monetary policy direction When the Federal Reserve announces its next policy move at 2 p. m. ET today, it will be the first of three major global central bank decisions this week.

Following on the heels of the Fed decision, the Bank of England (BOE) is widely expected to hold interest rates steady on Thursday. Though rising oil prices have caused some analysts to cast doubt, arguing that a BOE rate hike could be on the table. Then, on Friday, the Bank of Japan (BOJ) is expected to raise interest rates by a quarter of a percentage point for the first time in three months.

Such a move would bring the BOJ's rate to its highest level in 31 years after decades of ultra-low rates, per Reuters. Looking back, the European Central Bank (ECB) also raised its interest rate for the second time this year last Thursday, with ECB President Christine Lagarde underscoring a "highly uncertain" outlook for the European economy amid risks of higher inflation and dampened growth. It all spells a potential paradigm shift in global central bank policy as the wars in the Middle East and Ukraine drive up energy costs.

"We have long made the case about a regime change in inflation and interest rates, and we now think that a consensus is building among major central banks that it is time to nip inflation in the bud following a period of looking through what many thought were transitory shocks," RSM chief economist Joe Brusuelas wrote last week. Today at 2:45 PM UTC Hal Bundrick, CFP® How a Fed rate hike would affect your bank accounts, loans, credit cards, and investments The Federal Reserve is widely expected to raise interest rates on Wednesday, and the stock market's reaction to the Fed's announcement is likely to draw the most headlines, Yahoo Finance's Hal Bundrick writes. "You basically have a market where all of the heavy lifting has actually been done on the earnings side," John Shugar, a partner at Goldman Sachs, said in an analysis.

He pointed to "terrific opportunities" in various AI consumer sectors, though "over the next few weeks, we may have a lot more speed bumps. " Bundrick breaks down how the Fed affects a variety of assets: Savings accounts: Interest rates on savings accounts are only marginally better, clinging to 0. 38%.

But savings accounts are for near-term money. High-yield savings accounts have been more effective at paying interest. This is one category where rate shopping and subsequent Fed rate increases really pay off.

CDs: CD rates have begun inching higher. The national average on a 12-month CD is 1. 71%, but you can find better deals if you're willing to shop around — and move your money to the best offer.

Mortgage rates: Fed interest rate increases don't usually affect mortgage rates — the bond market often prices in hikes before monetary policy moves. Home loan rates have recently neared or topped 7% (depending on the rate reporting source), mirroring the higher yields of the 10-year Treasury note . Read more.

Today at 1:17 PM UTC Grace O'Donnell Fed begins second day of FOMC meeting Day two of a pivotal Fed meeting is underway. "The FOMC meeting began at 9:00 AM ET as scheduled," a Federal Reserve spokesperson told Yahoo Finance. Expectations of a rate hike have changed little since the meeting began yesterday.

As of Wednesday morning, traders saw a 92. 7% probability that the Fed will raise rates by 25 basis points, down slightly from the 93. 5% odds set a day ago, according to CME Group's FedWatch tool .

Today at 12:45 PM UTC Molly Moorhead Reminder that Trump threatened embargoes if the Fed doesn't lower rates As we await the Fed's decision — an expected hike — on interest rates later today, President Trump's reaction is one of the story lines we'll be following. Among the president's most recent comments about interest rates was this surprising response to a jump in the US trade deficit. "LOWER THE RATE OR I'LL STOP TRADING WITH COUNTRIES WITH WHICH WE HAVE A DEFICIT," Trump posted on Truth Social on Sept.

4, in what appeared to be a directive to the central bank. Truth Social Read more from Yahoo Finance's Ben Werschkul. Today at 12:34 PM UTC Grace O'Donnell Federal Reserve interest rate hikes usually pound stocks, but then something surprising happens Yahoo Finance's Brian Sozzi reports: Brace for minor market tremors if the Fed hikes interest rates, as many on Wall Street think will happen later today.

But if history holds up, any losses could prove short-lived. The S&P 500 has declined by an average of 4. 0% over the six weeks following the first Fed rate hike of a cycle across seven such episodes since 1988, per new analysis from strategists at The Kobeissi Letter.

Stocks recovered all of those losses over the next five to six weeks on average. In the six months following the first interest rate hike, the S&P 500 returned 4. 0% on average.

After 12 months, the S&P 500's average gain tallied +9. 0%. Positive returns have occurred in every episode except 2022 over the twelve months.

"Fed rate hikes have historically been great buying opportunities," the strategists added. Read more. Today at 11:40 AM UTC Grace O'Donnell What is the Fed's dot plot?

Yahoo Finance's Sarah Brady reports: Want to know where interest rates may be headed? While there's no way to predict the Federal Reserve 's next move, the Fed has tools that investors and consumers can look to for insights. Among them is the Fed's dot plot, which shows where the Fed's policymakers see interest rates headed in the next few years.

The dot plot is a chart that shows how the Fed's top policymakers — members of the Federal Open Market Committee (FOMC) — think the Fed will change short-term interest rates over the next few years. There are up to 19 dots on the Fed's dot plot, each one representing the prediction of one anonymous member of the Federal Reserve Board. Those predictions are updated at each FOMC meeting based on a review of what's happening with the economy and the outcomes each member believes are most likely in the future.

The Federal Reserve began publishing the chart in 2012 as part of an effort to increase transparency around its policies. The dot plot can now be found in the Summary of Economic Projections published each March, June, September, and December. Read more about the dot plot .

Today at 11:00 AM UTC Jenny McCall Warsh's words may matter more than the anticipated Fed rate hike Reuters reports: The Federal Reserve is expected on Wednesday to hike interest rates for the first time since 2023, a decision driven by stubbornly high inflation and a global rise in borrowing costs that will heighten scrutiny of how U. S. central bank chief Kevin Warsh describes the first monetary policy change on his watch.

But lifting the Fed's policy rate by a quarter ‌of a percentage point to the 3. 75%-4. 00% range is a step that has become almost inevitable, with inflation seemingly stuck above the central bank's 2% target, long-term global borrowing costs shifting higher, and Warsh facing doubts about his willingness to go against Trump's demands.

The pressing question now is how Warsh frames the policy decision, and whether ​global bond investors see it as a credible response to inflation that has been above target for more than five years and which has moved up since the start of Trump's current term in the White House. Read more. Today at 9:23 AM UTC Jenny McCall Fed seen hiking interest rates in defiance of Trump Bloomberg News reports: The Federal Reserve is expected to lift interest rates on Wednesday for the first time since 2023 as policymakers lose confidence that inflation will cool sufficiently without at least a nudge from the central bank.

That's likely to strain Chairman Kevin Warsh's relationship with President Donald Trump. Officials have held their benchmark rate steady in a range of 3. 5%-3.

75% since December as a majority of policymakers argued that progress in lowering inflation was being stalled by temporary factors. Doubts over that stance have grown steadily this year within the Fed, and a recent hot inflation report appears to have tipped the scales in favor of at least one near-term rate increase. Investors on Tuesday saw a greater than 90% chance of a quarter-point move this week and priced in another hike by the end of the year.

Read more. Today at 8:40 AM UTC Ivana Pino A look at the federal funds rate over the past 50 years: How has it changed? The Federal Reserve periodically adjusts its target rate to keep the economy running smoothly and consumer prices in check.

When the federal funds rate moves up or down, so do the interest rates on bank accounts and loans. In other words, changes in the Fed's rate impact how much your savings can grow and how much you pay to borrow money. So how does today's federal funds rate compare to past years?

Here's a look at historical Fed interest rates. Read more. Today at 5:50 AM UTC Grace O'Donnell Ahead of Fed meeting, Trump says US should have world's lowest interest rate Reuters reports: No country should have lower interest rates than the U.

S. , President Donald Trump said on Sunday, days before the Federal Reserve's ‌next policy meeting. Speaking to reporters at the Irish Open golf tournament, Trump said he did not know ‌whether Fed policymakers will raise interest rates at their meeting this week.

But he said the U. S. "should be paying the lowest interest rate in the ​world" no matter what the Federal Reserve's data indicates about inflation and the economy.

The Labor Department's Consumer Price Index, a key measure of underlying inflation, on Friday posted its largest increase in four months. That reinforced expectations that the U. S.

central bank will raise the target range for its federal funds rate, now at 3. 5% to 3. 75%, at the conclusion of ‌its Federal Open Market Committee meeting on ⁠Wednesday.

Price pressures remain elevated as the economy deals with Trump's import tax increases and surging energy prices tied to the Iran war. Many at the Fed worry that the longer ⁠inflation remains high, the greater the cost will be to get it back to target. Read more.

Today at 2:46 AM UTC Brian Sozzi Too early to judge Fed Chairman Kevin Warsh's communication style, billionaire investor David Rubenstein says Yahoo Finance's Brian Sozzi reports: Fed Chairman Kevin Warsh may soon realize that giving less information to the markets on his thinking about interest rate policy — as he has been inclined to do — may not be the best course of action. His legacy as Fed chair may ultimately be defined by whether he learns to adjust his communication with investors. "I don't want to say what [Warsh will] have to do, but I would say that the market obviously likes more information," Carlyle ( CG ) co-founder and Warsh's friend David Rubenstein said in a new episode of the Power Players with Brian Sozzi podcast (see video above or listen below).

"And so he may be able to do what he wants to do in time; it's too early to say. But he's a very smart, talented person, and I think the president picked a good person. " Few doubt Warsh's intelligence, but they are beginning to question what his leadership will mean for markets going forward.

So far, it has been a somewhat rocky start leading the world's most powerful central bank. Read more. Tue, September 15, 2026 at 11:43 PM UTC Ines Ferré 'Kevin Warsh has a conundrum': Wall Street weighs Fed's next move as bond yields rise Wall Street is overwhelmingly pricing in a quarter-percentage-point interest rate hike by the Federal Reserve at its meeting this week.

The question is whether Fed Chairman Kevin Warsh will unite with policymakers in favor of hiking rates or holding them steady. "Kevin Warsh has a conundrum," Macquarie global macro strategists Thierry Wizman and Gareth Berry wrote in a recent note. They noted that he can either follow the White House's appeal to not raise rates or "go with the internal flow and accede to the majority's wishes for a hike.

" "We think the second option is likelier," the strategists wrote. "Fed Chairs, after all, are there to help build consensus, but then vote with the majority. " Warsh has been mum about forward guidance.

If he votes against a hike, he could become the first Fed chair in modern history to dissent from the majority. Read more. Tue, September 15, 2026 at 10:30 PM UTC Molly Moorhead Fed rate hike on Wednesday now likely, say economists, and at least one more to follow: Reuters Poll From Reuters: The Federal Reserve will raise its interest rate on Wednesday and deliver at least one more hike by the end of March, according to a majority of economists polled by Reuters, reversing a fragile no-change consensus that prevailed before official data on Friday ‌showed firm inflation.

A run of strong economic data following Fed Chairman Kevin Warsh's Jackson Hole speech, widely perceived as hawkish, and prominent hike pricing from ‌markets already made several economists rethink rate-hold calls. But a new regime under Warsh of no rate guidance, along with heightened uncertainty, had left few economists ready to commit. Now, an 85% majority of economists, 86 of 101, ​in the Reuters survey conducted after Friday's inflation report said the Fed would raise rates by a quarter percentage point to 3.

75%-4. 00% at its September 15-16 meeting, the first increase since July 2023. Read more.

Tue, September 15, 2026 at 8:40 PM UTC Jake Conley Stocks could have a tough road ahead if the Fed hikes rates Oil prices ( BZ=F , CL=F ) are solidly back over the $100 per barrel mark . The August payrolls report showed the US economy added three times as many jobs as expected . Consumer pricing data showed "core" pricing ticking up faster than expected .

In other words, the case has grown increasingly strong for the Federal Reserve to issue its first rate hike in three years on Wednesday, as markets price in roughly a 90% probability of a quarter-point hike. If equity market performance remains true to historical precedent, that could spell an upcoming trough for stocks, Goldman Sachs analysts led by Ben Snider wrote over the weekend. Looking at history, the benchmark S&P 500 ( ^GSPC ) index has seen an average three-month return of negative 2% at the start of a Fed hiking cycle throughout the past few decades, Goldman noted over the weekend.

Read more. Tue, September 15, 2026 at 7:30 PM UTC Jake Conley Fed rate hike could disproportionally impact lower-income consumers, says investing CIO The market has priced in a roughly 93% chance that the Federal Reserve will raise rates by 25 basis points at tomorrow's meeting as Kevin Warsh's FOMC attempts to get a handle on inflation. That may disproportionally impact the bottom portion of America's "K-shaped" economy, raising debt servicing costs without providing legitimate relief, according to Mast Investments CIO Yung-Shin Kung.

"The primary mode through which hiking would work is by imparting greater stress on the bottom of the "K" which is already struggling through a supply shock," Kung wrote on Tuesday. "Hiking would be a high-sacrifice-ratio, poorly targeted tool that extracts most of its cost from people who aren't the source of the inflation problem. " Primary responsibility for the inflation crisis, Kung said, belongs to tariffs, the AI buildout, the oil supply stock, and stock market wealth accumulation — all of which he argues are better addressed through balance sheet adjustments by the Fed, not by moving rates.

Raising rates doesn't create more oil, the argument goes. Lower-income consumers would effectively see their wallets hit twice, Kung said. First, they must pay the increased prices seen on categories such as food and housing, "which a funds-rate hike barely touches.

" Then, tighter credit conditions make debt servicing more expensive. Meanwhile, Kung said, "the real driver of any genuine excess demand sails through mostly unaffected. " Tue, September 15, 2026 at 6:30 PM UTC Molly Moorhead Mark Zandi says a rate hike would be a 'serious policy mistake' Moody's Analytics chief economist Mark Zandi has a differing view from the 92% of Fed watchers who are betting on a rate hike this week.

"The odds of a serious Fed policy mistake are uncomfortably high and rising," Zandi posted on X on Monday. "The economy is already growing near potential (2% real GDP growth) and operating at full employment (unemployment a bit above 4%). Inflation is too high, to be sure, running above 3%.

But much of that is the fallout from higher energy prices and tariffs, supply shocks that rate hikes can't fix and that should fade on their own so long as inflation expectations stay anchored, as they have. He continued: "If the Fed tightens to bring inflation down faster, it must push growth below potential, and that is hard to do without layoffs, rising unemployment, and igniting a self-reinforcing negative cycle. " Investment in artificial intelligence that is fueling the stock market is a further complication, Zandi argues.

"To hit its inflation objective, the Fed either needs to rein in the AI boom or put even more pressure on the rest of the economy. Neither is a good outcome," he wrote. So what can the Fed do to avoid that?

"Of course, it doesn't have to choose either. It can wait. " Here's more from Moneywise.