September Fed Meeting: Live Updates and Commentary

Strong August retail sales solidify chance for a rate hike

Retail sales rebounded sharply in August, which economists say strengthens the chance for the Federal Reserve to raise rates this afternoon.

According to the Census Bureau, retail sales rose 1.2% last month, rebounding from July's downwardly revised 0.6% drop.

"If we learned anything from this morning's retail sales numbers, we learned that consumers have the discretionary spending power to keep themselves entertained," says Jeffrey Roach, chief economist for LPL Financial, who adds that the data signals another strong quarter of corporate earnings.

"We also expect the Fed will raise rates to address the inflationary pressures coming from the demand side of the economy," Roach notes.

- Karee Venema

Stocks open mostly higher on Fed Day

Stocks are trading mostly higher ahead of this afternoon's FOMC policy decision. At last check, the tech-heavy Nasdaq Composite is up 0.4% at 26,091 and the broader S&P 500 is 0.2% higher at 7,602. The blue-chip Dow Jones Industrial Average, meanwhile, is down 0.1% at 52,022.

Over in the bond market, the 2-year Treasury yield is down 3.6 basis points at 4.625% and the 10-year Treasury yield is off 3.1 basis points at 4.965%. Still, both are holding near recent multi-year highs.

"The Federal Reserve is under pressure from the bond market to hike rates, as it's not customary for the Fed funds rate to remain this far below where bond yields are trading," says Brent Wilsey, chief investment officer at Wilsey Asset Management. "If the Federal Reserve were to keep rates steady Wednesday, that could surprise stocks, and surprises are rarely received well in markets, and it could also damage the Fed's credibility, and reignite concerns that the central bank is caving to political pressure to keep rates steady."

- Karee Venema

Is this the eve of the most dovish FOMC surprise in history?

As Deutsche Bank strategists acknowledge in their "Fixed Income Chart of the Day" day note, it's almost 100% certain that the Federal Open Market Committee (FOMC) will raise the target range for the federal funds rate by 25 basis points on Wednesday.

Indeed, based on data they've collected, if the Fed keeps the target range where it is, "it would be the biggest dovish surprise at a scheduled FOMC meeting on record (going back to 1994, when the FOMC began announcing the policy action at the conclusion of its meetings)."

"We can certainly imagine a world in which, with different communications from Warsh, the market set-up for this meeting might be different," the strategists write. "But we think the Committee would be very uncomfortable surprising with a hold in the current environment."

– David Dittman

Stocks are down on day one of the September Fed meeting

Crude oil prices and Treasury yields kept climbing on Tuesday, as the Federal Open Market Committee (FOMC) met to talk about inflation and interest rates. All three main equity indexes opened in the red and trended lower through the trading session.

At the closing bell, the Dow Jones Industrial Average was down 0.6% at 52,092, the broad-based S&P 500 had shed 0.5% to 7,585, and the Nasdaq Composite was lower by 0.8% at 25,981.

Read more: Dow Loses 328 Points While Waiting for the Fed: Stock Market Today

Who Warsh whispers with

So Jon Hilsenrath is the original "Fed Whisperer," and Nick Timiraos has held the title for a number of years now.

But the current reporter on the Federal Reserve beat for The Wall Street Journal faces new barriers in his quest to get information from deep inside the central bank, if you believe Fed Chair Kevin Warsh.

Based on his public comments about buttoning up communications, it'd be fair to assume Warsh is enforcing fresh discipline with the press, compared to predecessors including Jerome Powell and going back to Alan Greenspan.

At the same time, as Timiraos revealed in early August, "President Trump has spoken repeatedly with Kevin Warsh since he became chairman of the Federal Reserve."

Less than three months into Wash's tenure as Fed chair Trump was "maintaining a line of communication between a president and a central bank chief that departs from recent precedent."

According to Timiraos and "people familiar with the matter," Trump "has sought Warsh’s counsel on a range of matters, including how the war in Iran and the rapid rise of artificial intelligence are affecting the economy."

Today, the headline over Timiraos's story suggests the relationship between Trump and Warsh signals a "truce" in the president's "war" on the Fed.

The reporter shares more detail, including the fact that White House National Economic Council Director Kevin Hassett (himself a candidate for the seat Warsh occupies) said on Sunday that inflation is getting better and the Fed doesn't need to raise rates.

Hassett added that the president "100% respects the independence of Kevin Warsh” and would “100% support” the Fed's decision.

"At the same time," Timiraos writes, "he conceded Trump wouldn’t be 'super happy' about a rate increase and said the Fed risks its reputation for staying out of politics when it changes rates near an election."

As Timiraos concludes, "The reverse is also true. With the White House demanding lower rates, standing pat when investors widely expect an increase would feed the suspicion that Warsh was accommodating the president who appointed him."

– David Dittman

Why Treasury yields are rising

It's about war, tariffs and competition for capital from AI hyperscalers. It's not about appetite for U.S. government debt.

That's according to Paul Christopher, head of global investment strategy at the Wells Fargo Investment Institute.

"Higher yields have prompted headlines to speculate that investors are refusing to buy U.S. Treasury securities," Christopher writes. "We do see growing pressure for Congress to rationalize its budget, but we think the headlines that link rising yields to an imminent government debt crisis consistently exaggerate the risk."

The strategist acknowledges the risks of rising borrowing costs. At the same time, he observes, "the September 9 U.S. 10-year Treasury note auction bid-to-cover of 2.71 showed that the number of investor bids were nearly three times the debt being offered, the strongest since 2019."

Christopher cites similar surges for yields on bonds issued by Germany, France and Italy, the three largest European Union economies.

Meanwhile, the 10-year Treasury yield has come down from its intraday peak of 5.041%, its highest level since 2007, to 4.996%. The 2-year Treasury yield hit a 52-week high today and is up 2.2 basis points at 4.656%. The 30-year Treasury yield (+3.6 bps, 5.346%) is also higher for the day.

– David Dittman

Survey says "raise rates"

Jon Hilsenrath is a former senior writer for The Wall Street Journal who became known on Wall Street as the "Fed Whisperer" for his close contacts inside the most important central bank in the world.

Today, Hilsenrath is a visiting scholar at Duke University, and he runs a regular survey of former Federal Reserve officials and staff about what they think about monetary policy.

In conjunction with the Duke economics department, Hilsenrath conducts his survey ahead of Federal Open Market Committee (FOMC) meetings in March, June, September and December.

"Among 32 former governors, regional bank presidents and staff who responded to the September survey of ex-central bank officials," the Duke economics department (PDF) said in a press release, "29 people said the Fed should raise the fed funds rate this week. One person said the Fed should hold; two didn’t answer the question."

Fed Chair Kevin Warsh has said that "price stability" is his top priority, though the general consensus is the Fed will struggle to meet its 2% inflation target without rate hikes.

According to one respondent, “The upside risks to the inflation outlook have worsened since July: energy prices have not reversed as expected, tariff pass-through continues, and the AI build-out is adding to price pressures.”

There are bigger picture issues in play, too: “The Fed and new chair's credibility is on the line,” one person said, and multiple respondents said the central bank’s reputation is at stake with this week’s decision.

– David Dittman

Yields higher, futures lower on first day of September Fed meeting

Yields across the maturity spectrum were up ahead of the opening bell on the first day of the September Federal Open Market Committee (FOMC) meeting.

Indeed, the 2-year Treasury yield (+1.8 bps, 4.652%) and the 10-year Treasury yield (+3.5 bps, 4.998%) have both reached new 52-week highs today, with the 10-year rising as high as 5.041%.

The 30-year Treasury yield was up 3.9 basis points to 5.367% about 30 minutes ahead of Tuesday's opening bell.

S&P 500, Nasdaq, and Dow futures all pointed to slightly negative opens for the main equity indexes.

West Texas Intermediate crude oil futures were up slightly, while Brent futures were down slightly after a relatively quiet weekend in the Middle East.

According to CME FedWatch, federal funds futures prices reflect a 92.7% probability of a 25-basis point rate cut at the conclusion of the meeting on Wednesday afternoon. That's down from 93.5% on Monday.

– David Dittman

Stocks close lower after the 10-year Treasury yield hits 5%

Stocks fell Monday as fears that artificial intelligence has advanced too far, too fast escalated. Wall Street also kept a close eye on oil prices and Treasury yields, which continued to climb ahead of this week's Fed meeting.

At the close, the blue-chip Dow Jones Industrial Average was down 0.3% to 52,421, the broader S&P 500 shed 0.5% to 7,619, and the tech-heavy Nasdaq Composite slipped 0.6% to 26,186.

Read more: Stocks Slip on AI Safety Worries, Rising Oil Prices: Stock Market Today

The SEP and dot plot will give key insights into the future path of monetary policy, says Johnson Investment Counsel's chief economist

"It is widely anticipated that the FOMC will vote to raise interest rates by 0.25% at Wednesday's meeting," says Brandon Zureick, chief economist and senior managing director at Johnson Investment Counsel. "Last week's hotter-than-expected CPI report likely provided sufficient evidence for policymakers that additional tightening may be necessary to return inflation to the Fed's 2% target."

Zureick says the more important question for investors is what comes next. "The bond market is currently pricing in one additional rate hike later this year, followed by one to two more increases in 2027," he notes. This makes the updated Summary of Economic Projections and closely watched dot plot critical for the September Fed meeting, as both " should provide valuable insight into how individual policymakers view the path of monetary policy beyond this week's meeting."

The chief economist does not anticipate any meaningful changes to the Fed statement or any explicit policy outlook from Chair Warsh. "His preference for minimalist communication has reduced the Fed's reliance on forward guidance, placing greater emphasis on incoming economic data and the updated dot plot. As a result, Treasury yields are likely to remain highly sensitive to inflation readings, particularly as energy prices continue to influence the near-term inflation outlook," Zureick concludes.

- Karee Venema

What will the dot plot show?

The Fed is widely expected to raise interest rates this time around. This meeting will also include the release of the central bank's Summary of Economic Projections (SEP) and "dot plot," which summarizes where each member expects monetary policy to be going forward.

In June, the Fed's dot plot indicated expectations that the federal funds rate would be raised to 3.8% by the end of 2026 — suggesting one quarter-point rate hike this year.

But following several data points — including the August CPI report — that showed inflation remains well above the Fed's target, futures traders are pricing in two quarter-point rate increases by year's end.

The June SEP also implied expectations for slightly slower economic growth, lower unemployment and higher inflation than what the FOMC forecast in March.

Deutsche Bank economists will be looking to see how Fed Chair Warsh and the updated SEP "frame the tightening cycle." The group does not expect any forward guidance, but they do anticipate "several revisions that point toward a slightly stronger overall economic outlook."

They also believe "the median dot should show another rate increase this year, with several officials projecting more than that."

- Karee Venema

When is the next Fed meeting on interest rates?

The Federal Open Market Committee will begin its next two-day policy meeting this Tuesday, September 15. It will conclude on Wednesday, September 16, at 2 pm Eastern Standard Time with the central bank's latest policy decision.

According to CME Group FedWatch, futures traders are pricing in a 93% chance the FOMC will raise the federal funds rate by 25 basis points (0.25%) this time around, to a target range of 3.75% to 4.00%.

If the Fed does indeed raise rates, it will mark the first time it has done so since July 2023.

- Karee Venema

Who gets to vote at the September Fed meeting?

The Federal Open Market Committee (FOMC) has 12 total members, eight permanent and four who rotate each year.

The eight permanent voting committee members include the Fed chair and vice chair, the five Fed governors and the president of the New York Fed.

Four regional Fed presidents are rotated in each calendar year.

The 2026 FOMC voting committee consists of:

The Federal Open Market Committee (FOMC) has 12 total members, eight permanent and four who rotate each year.

The eight permanent voting committee members include the Fed chair and vice chair, the five Fed governors and the president of the New York Fed.

Four regional Fed presidents are rotated in each calendar year.

The 2026 FOMC voting committee consists of:

• Fed Chair Kevin Warsh
• Vice Chair Philip Jefferson
• Fed Governor Michael Barr
• Fed Governor Michelle Bowman
• Fed Governor Lisa Cook
• Fed Governor Jerome Powell
• Fed Governor Christopher Waller
• New York Fed President John Williams
• Cleveland Fed President Beth Hammack
• Minneapolis Fed President Neel Kashkari
• Dallas Fed President Lorie Logan
• Philadelphia Fed President Anna Paulson

In 2027, the presidents from Chicago, Richmond, Atlanta and San Francisco will rotate in as FOMC voting members, according to the Federal Reserve.

- Karee Venema

The stars are aligning for a rate hike but Warsh remains a big question mark

The stars are aligning for the Fed to hike short-term interest rates by a quarter percentage point at the policy meeting this Wednesday. Energy prices haven't come down from their lofty levels, and non-energy price inflation hasn't improved, either. The economy is doing ok, with a strong employment gain in August.

The majority of the committee is likely to favor raising rates, with a minority wanting to leave them unchanged. This meeting is especially important because the next one ends on October 28, and it's unlikely that the Fed will want to start raising rates right before Election Day. That would spark conspiracy theories, for sure. The safest political route is to raise rates at the September and December meetings, and leave them unchanged in October.

But, as always, the key question mark is Federal Reserve Chair Kevin Warsh. Warsh has talked tough on inflation, but he may be hoping that will suffice, and he won't have to actually raise rates. If so, then it appears that he has talked himself into a corner, and he may have no choice but to raise. If he resists, the long-term Treasury bond market is likely to pitch a fit and drive rates up anyway. We will see what happens.

- David Payne

Will Kevin Warsh support a rate hike?

"Fed Chair Kevin Warsh finds himself caught between a rock and a hard place heading into this week's FOMC meeting," says Jay Woods, chief market strategist at Freedom Capital Markets. "The economic data increasingly argues for a rate hike. The market overwhelmingly expects one. Several of his colleagues appear ready to vote for one."

But the question, Woods says, is whether Warsh will support a rate hike if the committee votes for one.

In July, the Fed's decision to hold rates steady was split one, with three members — Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari and Dallas Fed President Lorie Logan — voting to raise rates by a quarter-percentage point.

The August jobs report quieted concerns that the labor market is in dire straits, while the August Consumer Price Index (CPI) and Producer Price Index (PPI) reports showed that inflation remains well above the Fed's 2% target.

But Woods says that Warsh could cite core CPI in arguments to hold rates steady again, as the year-over-year increase slowed to 2.4% in August from 2.5% in July.

Given that Warsh said in his Jackson Hole speech that the Fed should focus more on trends than isolated data points, Woods believes "this could be his one last line of defense and go against a growing chorus and odds that there is a hike."

- Karee Venema

Fed meeting schedule for 2026

The next Fed meeting, which runs from September 15 through 16, marks the sixth gathering of 2026.

"The committee meets eight times a year, or about once every six weeks," writes Kiplinger contributor Dan Burrows in his feature, "When Is the Next Fed Meeting?".

The Federal Open Market Committee "is required to meet at least four times a year and may convene additional meetings if necessary," Burrows adds, noting that "the convention of meeting eight times per year dates back to the market stresses of 1981."

Fed meetings last two days and wrap up with the release of a policy decision at 2 pm Eastern Standard Time. This is typically followed by the Fed chair's press conference at 2:30 pm, though this could change under Warsh's leadership.

Here is the full remaining Fed meeting schedule for 2026:

• September 15 to 16
• October 27 to 28
• December 8 to 9

- Karee Venema

Stocks trade lower to start Fed week; oil prices spike

The stock market is in negative territory Monday as the tech sector sinks on worries that artificial intelligence (AI) technology has advanced too far, too fast. At last check, the tech-heavy Nasdaq Composite is down 0.8% at 26,129, the broader S&P 500 is off 0.6% at 7,607, and the blue-chip Dow Jones Industrial Average is 0.4% lower at 52,369.

Tech stocks that have a hand in AI are some of the biggest decliners, including chipmakers Advanced Micro Devices (AMD, -5.7%), Intel (INTC, -5.4%) and Nvidia (NVDA, -5.7%), and AI infrastructure providers Nebius Group (NBIS, -5.2%) and Vertiv Holdings (VRT, -7.8%).

This deepens losses in the main indexes since the start of the month, driven in part by rising energy prices from the ongoing war in Iran. "The backdrop has become increasingly uncomfortable for equities with oil surging again, bond yields remaining elevated and markets anticipating potential rate hikes from both the Fed and Bank of Japan this week," says Daniela Hathorn, senior market analyst at Capital.com. "Oil is once again the biggest geopolitical story."

Today, front-month West Texas Intermediate crude futures are up 3.2% at $103.29 per barrel, and have now gained 20% for the month to date.

- Karee Venema