Fed Hikes Rates by 25 Basis Points Amid Solid Economic Growth

The Federal Reserve raised interest rates by 25 basis points to 4%, marking its first hike since 2023, in line with market expectations.

The decision saw the US dollar and bond yields rise, while Wall Street futures reacted moderately about an hour after the announcement, with the Nasdaq 100 futures down 0.05% and S&P 500 futures down 0.51%, their lowest levels since August 3.

The median Fed interest rate forecast for the end of 2026 increased to 4.125% from 3.75%, indicating a possibility of one more rate hike, with 16 out of 19 FOMC members projecting at least one additional increase in 2026.