Home›Bonds & Rates›Central Banks›UOB sees another Fed hike after September minutes supp…

UOB sees another Fed hike after September minutes supported tightening

UOB expects the Fed funds target rate upper bound to peak at 4.50% after two hikes in December 2026 and one in early 2027.

Reported · Written up by our desk · Central Banks

UOB analyst Alvin Liew examined the Federal Reserve’s September 2026 FOMC minutes and said the record showed a unanimous shift toward additional tightening, with all 19 participants backing a 25 basis point hike to a 3.75% to 4.00% range. FXStreet reports that the minutes reflected agreement that inflation remained elevated, the labor market was near maximum employment, and economic activity continued expanding at a solid pace.

According to FXStreet, participants differed on the rationale for tightening, including views that the hike served as inflation risk insurance versus concerns about stronger underlying demand. Still, Liew said most policymakers judged that another rate increase would likely be appropriate by year end.

FXStreet also cited Liew’s expectation that the Fed did not commit to a move at the October meeting, with the stance instead pointing to further action later. He expects two additional hikes in December 2026 and in early 1Q 2027, which would put the Fed funds target rate upper bound at 4.50% before it is held through 2027, according to FXStreet.

More like this

Sources