Fed minutes: most officials see one more rate hike this year, timing left open
In short
Minutes of the US Federal Reserve's September FOMC meeting, released on October 7 US time, show that most participants judged one more increase in the federal funds target range by year-end likely to be appropriate. The minutes did not say when, and Korean outlets reported no signal of a hike at the October meeting. At the September meeting the Fed raised rates by 0.25 percentage point to 3.75%-4.00% in a unanimous decision.
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Most participants at the US Federal Reserve's September Federal Open Market Committee meeting judged that one more increase in the federal funds target range by the end of the year would likely be appropriate, according to minutes the Fed released on October 7 local time. The minutes did not specify when, and Korean outlets reported that they contained no specific hint of a hike at the next meeting. Participants stressed that they approach each meeting with an open mind and that future decisions depend on incoming information and its effect on the outlook and the balance of risks. [ 3 , 4 , 5 , 6 , 7 , 9 , 10 ]
At the September meeting the Fed raised its rate by 0.25 percentage point to 3.75%-4.00%. Seoul Economic Daily and Newsis described it as the first increase in three years and two months and reported the decision was unanimous; Asia Economy reported that all participants supported it and the 12 voting members voted in favour. Newsis reported that 16 of the 18 members submitting projections expected one more hike this year, with the overall projections leaning toward no further increase in 2027. [ 3 , 4 , 5 ]
According to the minutes as reported, many participants described a higher rate path as prudent risk management against inflation staying above target because of stronger-than-expected demand or further supply shocks. Some argued that the baseline outlook itself warranted higher rates, and a couple cited price increases tied to energy market disruption and AI-related demand. Asia Economy reported that some participants assessed the pre-hike rate as not restrictive or only modestly so. Newsis reported that participants saw the labour market as close to full employment. [ 3 , 4 , 5 ]
Seoul Economic Daily reported that after the release, the futures-implied probability of an October hold rose to 82.8% from 80.1%. Asia Economy reported that the implied chance of a further 0.25-point hike had fallen to about 20% from as high as 70% right after the September meeting, and that the two-year Treasury yield fell more than 10 basis points in a week to about 4.7%. Seoul Economic Daily also cited market views that the Fed would avoid a hike ahead of the November 3 midterm elections. [ 3 , 4 ]
Outlets noted recent cautious remarks: New York Fed President John Williams said on September 29 that one more hike this year may be appropriate but there was no need to hurry, and Vice Chair Philip Jefferson said on October 1 that data trends should be reviewed carefully, Seoul Economic Daily reported. Asia Economy cited October 3 jobs data showing average hourly earnings growth of 3.0% year on year, and said September CPI due on October 14 would be a key test. The next meetings are scheduled for late October and December 8-9. [ 3 , 4 , 5 ]
Why it matters
Korean business outlets read the minutes as keeping a further US tightening on the table while making an October move less likely; Seoul Economic Daily reported futures-implied odds of an October hold rose to 82.8%. Asia Economy reported that September consumer price data due on October 14 is expected to weigh on whether the next hike comes in December.
Key facts
- Most FOMC participants judged that raising the target range once more by the end of the year would likely be appropriate. [ 3 , 4 , 5 , 6 , 7 , 9 , 10 ]
- The minutes gave no specific timing for the next increase and no indication of a move at the October meeting. [ 3 , 4 , 5 , 9 , 10 ]
- In September the Fed raised its rate by 0.25 percentage point to 3.75%-4.00%, unanimously. [ 3 , 4 ]
- The September increase was the first in three years and two months, according to Seoul Economic Daily and Newsis. [ 4 , 5 ]
- Participants said they approach each meeting with an open mind and decisions will depend on incoming information. [ 3 , 4 , 5 ]
- Newsis reported that 16 of the 18 FOMC members submitting projections expected one more hike this year. [ 5 ]
- Seoul Economic Daily reported the futures-implied probability of an October hold at 82.8%, up from 80.1% the previous day. [ 4 ]
- The remaining FOMC meetings this year are in late October and on December 8-9. [ 4 , 5 ]
Confirmed by several sources
- Most September FOMC participants judged one more rate increase by year-end likely appropriate. [ 3 , 4 , 5 , 6 , 9 ]
- The minutes did not specify the timing of the next increase. [ 3 , 4 , 5 , 9 ]
- The Fed raised its rate by 0.25 percentage point to 3.75%-4.00% in September. [ 3 , 4 ]
- The September decision was unanimous. [ 3 , 4 , 5 ]
- Many participants framed higher rates as risk management against persistent above-target inflation. [ 4 , 5 ]
Still unclear
- Whether the Fed will raise rates at its October meeting or wait until December. The minutes left timing open; outlets offer market expectations rather than a Fed decision.
- The date of the October meeting. Seoul Economic Daily gives October 27-28 while Newsis mentions October 28.
- Market odds of a further hike. Asia Economy and Seoul Economic Daily cite different futures measures (about 20% hike odds versus 82.8% hold odds).
- The view that the Fed will avoid a hike before the November 3 midterm elections. Reported only by Seoul Economic Daily as a market expectation.
What local media are saying
Timeline, local time
- Newsis runs a breaking report that the minutes favour one more hike this year without setting a date. [ 2 ]
- Asia Economy reports a consensus for a further hike, with an October hold seen as more likely. [ 3 ]
- Seoul Economic Daily reports October hold odds rose to 82.8% after the minutes. [ 4 ]
- Chosun Ilbo reports most participants saw one more hike as appropriate. [ 6 , 7 ]