Fed minutes: most officials see another rate hike by year end as yields climb

The Fed released the minutes of its September 15-16 meeting at 2:00 p.m. ET on October 7, showing a 12-0 vote to raise the target range to 3.75%-4.00%. Most participants said another increase would likely be appropriate by year end, and they described inflation as elevated with upside risks. The minutes also tie the rise in 2- to 10-year yields, about 35 basis points between meetings, to a higher policy path, geopolitics, and heavy AI-related debt issuance.

• Vote 12-0 to raise target range to 3.75%-4.00%; no dissent
• Staff estimated 12-month PCE inflation to August at 3.8% total and 3.4% core, before a BEA methodology change
• Most participants: another rate increase would likely be appropriate by year end
• 2- to 10-year nominal yields rose about 35 basis points over the intermeeting period
• Desk paused reserve management purchases; pace to be reviewed monthly