The Federal Reserve is No Longer Projected to Hike Interest Rates This Month
According to Polymarket forecasts and statements from Federal Reserve officials, the central bank is no longer expected to raise interest rates at the upcoming FOMC meeting this month, despite climbing mortgage rates.
Based on forecasts monitored by Polymarket, the Federal Reserve is no longer anticipated to raise interest rates at the upcoming FOMC meeting later this month. This shift follows statements from Fed officials indicating that there is currently no pressure to enact another rate increase. On Thursday, Vice Chair Philip Jefferson stated that while he backed the central bank’s rate hike last month, he perceives no urgency for an additional move.
“Any future adjustments in policy should be determined by carefully examining trends in the data, the evolving outlook, and the balance of risks,” Jefferson noted in prepared remarks for the University of Virginia’s Darden School of Business. During its September 16 meeting, the Federal Reserve previously raised its benchmark federal funds rate by 25 basis points, bringing it to a target range of 3.75%–4.00%.
Worry over a potential interest rate hike surfaced this week amid a continued climb in mortgage rates. Driven by an ongoing global bond selloff, mortgage rates have hit their highest marks since late 2023. Mortgage News Daily reported that the average 30-year fixed-rate mortgage stood at 7.6% on Wednesday, marking an increase of roughly 15 basis points compared to the prior week. Such levels have not been observed since November 2023, with rates jumping by 70 basis points over the past month alone.
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Even with pressure from the Trump administration to pursue lower interest rates, the Fed under Kevin Warsh has held off on implementing drastic rate shifts, and its overarching strategy remains difficult to decipher. Last month’s rate increase marked the first action of its kind in three years.
