FOMC to Raise Target Rate at September Meeting, Focus on Projections, Divisions

02:57 PM EDT, 09/15/2026 (MT Newswires) -- The Federal Open Market Committee is expected to lift its target range at its meeting this week while an update to the Summary of Economic Projections will garner attention. Currently, the CME's FedWatch Tool sees a 92.3% chance of a 25-basis point rate increase to a target range of 3.75% to 4.00% and a 7.7% chance of no change to the current 3.50% to 3.75% range. The FOMC's statement following Wednesday's meeting is due for release at 2:00 pm ET, with Federal Reserve Chairman Kevin Warsh's press conference scheduled to begin at 2:30 pm ET. Since the previous FOMC meeting, there have been divisions among Fed officials on the need for a rate increase at this meeting. Warsh said on Aug. 28 that inflation is the more concerning part of the Fed's dual mandate and that he is committed to the 2% inflation target, noting that inflation will not slow on its own. He also repeated his belief that forward guidance can handcuff the Fed from making decisions and as such did not give an indication of what he expected to happen at this week's meeting. Cleveland Fed President Beth Hammack, a voter on the FOMC this year, was more decisive. Hammack, one of the three officials to dissent at the previous meeting in favor of a 25-basis point rate reduction, said on Aug. 27 that the FOMC should act now to help move inflation back to target, suggesting that the pain for businesses and consumers will be greater if the FOMC waits. Fed Governor Christopher Waller has said that his policy decisions would likely be based on inflation data and that he is willing to maintain the current rate level for another meeting if there is continued progress toward the 2% goal but would consider a rate hike if there is an acceleration in price growth. Since those comments, the August employment report showed strong payrolls growth and labor force participation, while the August consumer price report indicated that inflation remains elevated, though the pace of annual growth has leveled off. Updates to SEP could provide the guidance that comments from officials have not. In the previous release in June, the median forecast was for one rate hike by the end of the year, followed by one rate cut in each of the next two years. More recently, the conflict in the Middle East continues to escalate and bond yields have surged as a result, so an update to more rate increases in 2026 or the removal of the expected reductions in 2027 and 2028 could signal a hawkish shift by participants that were previously inclined to hold pat.