WASHINGTON — Minutes from the Federal Reserve's most recent meeting released Wednesday indicate that most officials expect another interest rate increase this year to combat persistent inflation. The central bank's policy committee unanimously agreed that inflation remains elevated and has not made much progress toward its 2% target in recent months.

Federal Reserve Chairman Kevin Warsh addressed the committee's stance at a news conference following the September meeting. "The plain fact is that inflation is too high and has been for too long," Warsh said. He added, "We must be confident that underlying inflation is moving to our objective clearly and at sufficient speed. Today the FOMC decided that this standard has not satisfied."

Of the 18 officials who submitted forecasts, 16 said they expected another interest rate increase this year. Many Federal Reserve officials believe inflation is stuck between 2.5% and 3%, above the target, even when excluding trends such as higher oil and gas prices and tariffs.

Several policymakers indicated that they viewed the current federal funds rate as too low to restrain the economy or acting only as a mild restraint. Many Federal Reserve officials said that financial conditions, which include rising stock prices, appeared to be supportive of economic growth. Philip Jefferson, vice chair of the Federal Reserve’s board of governors, said last week that policymakers “will need to come to our own judgement, which may take more time.”

The Federal Reserve increased its key interest rate by a quarter-point to about 3.9% at the Sept. 15-16 meeting. This decision raised the target range for the federal funds rate by 25 basis points to 3.75-4 percent, marking the central bank's first increase in three years. All 12 voting members supported the decision to raise the rate in support of the Federal Reserve’s dual mandate. Primary source: federalreserve.gov

Overall prices rose 3.4% compared with a year earlier in August, while core prices increased 3%, according to the Federal Reserve’s preferred measure. On a monthly basis, prices rose 0.3% from July to August, and core prices rose 0.2%. A survey released Wednesday by the New York Fed showed consumer fears over rising prices in the next year are at their highest since May 2023.

President Donald Trump criticized the Federal Reserve's rate-setting committee for voting to raise rates, calling them "very political." "They’re raising rates to make Trump do as bad as they can possibly do," President Donald Trump said. Despite this criticism, the president expressed support for Federal Reserve Chairman Kevin Warsh, whom he appointed earlier this year. Warsh previously served as a member of the Federal Reserve Board of Governors from 2006 to 2011.

Wall Street investors forecast the Federal Reserve will keep its rate unchanged at its Oct. 28-29 meeting and raise it at the December meeting, according to futures pricing. Treasury yields have hit levels not seen since 2002.

What's New

The Federal Open Market Committee raised the target range for the federal funds rate by ¼ percentage point to 3¾ to 4 percent at its September 15-16 meeting, with all 12 voting members supporting the decision. The Federal Open Market Committee raised the federal funds rate to 3.75-4% during the September 15-16, 2026 meeting, its first increase in three years. The Federal Open Market Committee raised the target range for the federal funds rate by 25 basis points to 3.75-4 percent at its September 15-16 meeting, with all 12 voting members supporting the decision. Primary source: federalreserve.gov