Federal Reserve Chairman Kevin Warsh during a press conference after the Federal Open Market Committee meeting in Washington, September 16, 2026.
Daniel Heuer | Bloomberg | Getty Images
The Federal Reserve delivered its long-awaited interest rate hike on Wednesday, with Chairman Kevin Warsh giving a noticeably brief press conference afterwards to emphasize policymakers’ resolute commitment to combating inflation.
Here are five key takeaways.
A pretty unified message: The Fed’s quarter-point rate hike was roughly in line with market expectations. At least somewhat surprisingly, the vote was unanimous. There was widespread speculation that at least one voter would object, given the wide range of views expressed by policymakers in recent weeks, with much of the speculation centered on Gov. Christopher Waller. But in the end, all 12 voters on the Federal Open Market Committee agreed with the decision, and the market didn’t like it. Equities were priced green and bond yields fell as interest rates were determined. It didn’t last long. Whether due to Mr. Warsh’s hawkish tone on inflation or simply the general prospect of multiple interest rate hikes, stocks tumbled after this decision. The Dow Jones Industrial Average fell 631 points, and the yield on the two-year Treasury note, the security most sensitive to the Fed’s interest rate expectations, jumped more than 7 basis points. The sell-off was reminiscent of the reaction to the July FOMC meeting and Warsh press conference. Short Statement, Short Presser: As with the previous two meetings under the Warsh administration, the post-meeting statement was brief to say the least. The statement was just 130 words, even shorter than July’s 166 words and on par with June’s letter. Warsh followed up with a press conference, answering questions from reporters for about 22 minutes during a session that lasted only about 30 minutes. Connecting the dots: A dot plot of individual officials’ expectations for FOMC interest rates shows a fairly coherent group in 2026, but wide dispersion after that. Sixteen of the 18 participants expected at least one more rate hike this year. However, over the years there has been considerable disagreement. Eight of them expect another rate hike in 2027, nine out of 17 expect rates to be stable or better in 2028, and 10 expect no rate cuts until 2029. This was important because President Donald Trump has once again raised his anti-Fed sword, going so far as to threaten to cut off trade with some countries if the Fed doesn’t make cuts. “There’s nothing nice about debating with the president,” he said at one point, then added, “Part of the Fed’s independence is that we stay in our lane. Independence is a two-way street.”
what they are saying
“This is unlikely to be the end of Fed rate hikes… With an unemployment rate of about 4% and a core PCE forecast of 3.5%, it’s hard to say the Fed shouldn’t be focused on inflation. But monetary policy looks like a very expensive way to solve this problem right now.” — Mike Madowitz, chief economist at the liberal think tank Roosevelt Institute
“Risk assets were not impressed with today’s FOMC results, with expectations for limited future rate hikes fading in the face of the Fed’s determination to tackle inflation. Still, after the initial reset, we believe Chairman Warsh’s clear message could actually help support bond prices further off the curve.” — Andrzej Skiba, Head of BlueBay’s U.S. Fixed Income Team, RBC Global Asset Management
“Warsh’s press conferences were methodical, confident, and consistently hawkish without coming off as crazy. He balanced a tough but disciplined message on inflation with optimism about growth, which has been building since the beginning of the summer.” — Krishna Guha, Head of Economics and Central Banking Strategy, Evercore ISI
