Fed minutes: every official backed September's rate increase, and most expected another by year end

The Federal Reserve posted the minutes at 2:00 p.m. Eastern on Wednesday. They cover the meeting of Sept. 15–16. The vote was 12–0. The minutes say all participants supported raising the target range for the federal funds rate a quarter point, to 3-3/4 to 4 percent.

Officials said inflation remained elevated and that they had not seen sufficient progress on lowering inflation in recent months. The staff estimated that inflation in the Fed's preferred price gauge edged up to 3.8 percent in August, with the core measure, which leaves out food and energy, at 3.4 percent. Under a new Bureau of Economic Analysis method that took effect at the end of September, the staff put those figures at 3.6 percent and 3.2 percent.

Participants generally assessed inflation risk as skewed to the upside. Some said those risks had become more skewed in recent months. Some worried that after more than five years of inflation above 2 percent, people's expectations could start to shift.

They did not give one reason for the increase. Many called it insurance, a prudent step on risk-management grounds. A number said their main forecast alone called for it. Several said today's rate is not restrictive or only mildly restrictive, meaning it may not be slowing the economy much.

They called the labor market close to maximum employment, and a majority said it had strengthened a bit. Several noted low hiring and low layoffs.

Several said stock gains were helping higher-income families spend, while low- and moderate-income households faced strains from energy prices. A couple said farms were strained by drought and higher diesel prices.

A few discussed the rise in long-term Treasury yields. They cited a stronger economy, increased expectations for borrowing tied to artificial intelligence, and geopolitics.

The staff's forecast has inflation reaching 2 percent in 2029. The minutes say the next meeting is Tuesday–Wednesday, Oct. 27–28, and that each meeting will depend on new data. They do not say what the committee will do then. They name no names.