Fed Expected to Hike Rates for First Time Since 2023

Markets are anticipating a rate hike at the Federal Open Market Committee's (FOMC) meeting on September 15-16, 2026. Bloomberg Markets suggests that bond markets expect a 25 basis point increase to 3.75% to 4.00%, which would be the Fed's first rate hike since 2023.

The current federal funds target range is at 3.50% to 3.75%. According to CME FedWatch tool probabilities, there has been varying degrees of market confidence in a rate hike. Recent comments from prominent figures like Richards have also noted the difficulty in avoiding such a move.

Goldman Sachs and other financial institutions' commentary have added to the anticipation of a potential rate increase. The FOMC's decision will be crucial in shaping future monetary policy expectations, with key Federal Reserve members likely providing further insights into the Fed's policy direction after the meeting.