Interest Rate Outlook: Scenarios, Not Predictions
The short answer is that no single interest-rate path is locked in. The Federal Reserve's September projections lean toward one more increase this year and then a long pause, but the projections are individual assessments, not a committee promise, and the minutes of that meeting stress that future decisions will depend on incoming data. The useful question is not which forecast to believe, but which incoming data would move the Fed toward each plausible path. What actually changed in September On September 16, 2026, the Federal Open Market Committee raised the target range for the federal funds rate by 0.25 percentage point, to 3.75 to 4 percent, effective September 17. The vote was unanimous, 12 to 0. The interest rate paid on reserve balances rose to 3.90 percent, and the primary credit rate rose to 4 percent. That target range is not the rate on a mortgage, a credit card, or a savings account. It guides the overnight federal funds market and influences broader borrowing costs th...