The Federal Reserve concluded its meeting on September 15–16, releasing the quarterly Summary of Economic Projections. Markets anticipated a 99% probability of a 25 basis point rate hike, which would move the federal funds target range from 3.50–3.75% to 3.75–4.00%.
The June 2026 projections previously estimated real GDP growth at 2.2%, an unemployment rate of 4.3%, and PCE inflation at 3.6% by the end of the year. These figures remain significantly higher than the central bank’s long-standing 2% inflation target.
Analysts expected the September updates to reflect higher inflation forecasts and a steeper interest rate path compared to June. The release includes the dot plot, which maps anonymous interest rate forecasts from FOMC members and serves as a key indicator for market participants.
A hawkish shift in projections typically impacts long-duration assets, leading to rising Treasury yields and a stronger dollar. As the federal funds rate approaches 4%, market observers are monitoring delinquency rates in sectors sensitive to interest rate changes.
