Federal Reserve Expected to Pause Rate Hikes This Month

Based on forecasts monitored by Polymarket, the Federal Reserve is no longer anticipated to raise interest rates during the upcoming FOMC meeting later this month. This shift follows statements from Fed officials indicating that a prompt rate hike is unnecessary. On Thursday, Vice Chair Philip Jefferson noted that while he backed the U.S. central bank’s rate increase last month, he perceives no pressing need for an immediate follow-up action.

“Any future adjustments in policy should be determined by carefully examining trends in the data, the evolving outlook, and the balance of risks,” Jefferson stated in prepared remarks for the University of Virginia’s Darden School of Business. At its September 16 meeting, the Federal Reserve previously increased its benchmark federal funds rate by 25 basis points, bringing the target range to 3.75%–4.00%.

Apprehensions regarding a potential rate increase surfaced this week as mortgage rates kept climbing. Driven by an ongoing global bond selloff, mortgage rates hit their highest peaks since late 2023. Mortgage News Daily reported that the average 30-year fixed-rate mortgage reached 7.6% on Wednesday, marking an increase of roughly 15 basis points compared to the previous week. These 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 push interest rates lower, the Federal Reserve under Kevin Warsh has refrained from implementing drastic alterations to borrowing costs, keeping its long-term strategy difficult to decipher. Last month’s rate hike marked the first occurrence of its kind in a span of three years.

Frequently Asked Questions

Is the Federal Reserve expected to hike interest rates this month?

No, according to forecasts tracked by Polymarket, the Federal Reserve is no longer projected to raise interest rates at the upcoming FOMC meeting later this month.

What did Fed Vice Chair Philip Jefferson say about future rate hikes?

While Philip Jefferson supported the U.S. central bank’s rate increase last month, he stated that he currently sees no urgency to make another move and that future policy adjustments will depend on data trends, the evolving outlook, and the balance of risks.

What is the current state of mortgage rates?

As of Wednesday, the average 30-year fixed-rate mortgage reached 7.6% according to Mortgage News Daily, hitting its highest level since November 2023 following a 70-basis-point increase over the past month.

When did the Federal Reserve last raise its benchmark interest rate?

The Federal Reserve last raised its benchmark federal funds rate by 25 basis points to a target range of 3.75%–4.00% at its September 16 meeting, which was the first rate hike of its kind in three years.

What pressure has the Fed faced regarding interest rates?

The Federal Reserve, operating under Kevin Warsh, has faced pressure from the Trump administration to continue lowering interest rates.