Federal Reserve releases September FOMC projections as rate hike odds hit 99%

The Federal Reserve Board and the Federal Open Market Committee wrapped up their September 15-16 meeting with a closely watched release: the Summary of Economic Projections, the quarterly document that tells markets not just where rates are today, but where policymakers expect them to go. The timing matters. Markets had been pricing a 99% probability of a 25 basis point rate increase heading into the meeting, making the hike itself less of a surprise than what comes after it. What the projections show The expected rate move would shift the federal funds target range from 3.50-3.75% to 3.75-4.00%, extending a tightening cycle that had paused for several consecutive meetings before September. The June 2026 SEP had already flagged elevated price pressures, with median projections showing real GDP growth of 2.2%, an unemployment rate of 4.3%, and PCE inflation running at 3.6% by year-end. The PCE figure sits well above the 2% target that the central bank has spent years defending. Analysts going into the September meeting expected the updated projections to push inflation forecasts higher still, and to steepen the rate path relative to what June showed. Tariff pressures and energy cost...