FOMC Meeting Today [LIVE] Updates: Fed Delivers 25-Bps Rate Hike, CLARITY Act Stalls

Federal Reserve Chair Warsh said the U.S. economy is strengthening as the central bank moves forward with its latest interest-rate decision. Warsh said he was “hard-pressed to call financial conditions restrictive,” adding that this view was widely shared by the Federal Open Market Committee (FOMC). He stressed that price stability remains the Fed’s predominant focus and said policymakers must be confident that inflation is moving towards the central bank’s 2% objective. Warsh also disclosed that he did not submit a dot for the Fed’s latest dot plot. His remarks reinforce the central bank’s continued focus on bringing inflation back to its 2% target.

The U.S. Federal Reserve has raised interest rates by 25 basis points. The move marks the Fed’s first rate hike since July 2023 and ends its longest interest-rate pause since 2008. The decision comes after the Federal Open Market Committee’s September 15–16 meeting. The Fed had kept its benchmark rate unchanged at 3.50%–3.75% through its July meeting, with three officials then favouring a quarter-point increase.

The Ways and Means Committee passed the Digital Asset Tax Certainty Act, marking a step toward establishing a clear federal tax framework for digital assets. The bill advanced through bipartisan support, with Republicans and Democrats working together to modernize outdated tax rules that had failed to keep pace with digital assets becoming part of everyday financial activity for millions of Americans, aiming to put crypto on equal footing with traditional financial assets.

The Atlanta Fed’s GDPNow estimate for Q3 growth jumped to 5.1% from 4.42%, driven largely by stronger consumer spending following today’s retail sales data. Real consumption is now expected to contribute 2.83 percentage points to growth, while private domestic final purchases are tracking at 4.7%.

Fundstrat’s Tom Lee said markets are holding steady until today’s FOMC rate decision at 2:15 PM ET, arguing stocks are positioned to rally regardless of the outcome. If the Fed raises rates, he expects future rate cut expectations to get removed while the 10-year yield drops, supporting equities. If the Fed holds instead, he sees it as a dovish surprise that shifts market focus toward an ongoing hold regime, also supportive for stocks. Lee said the most likely outcome is a rally following the 2:15 PM decision.

Major banks are focused on how Fed Chair Kevin Warsh frames the path ahead if the Fed hikes today. Barclays expects Warsh to stress solid growth, near-full employment, and persistently high inflation, largely maintaining his prior hawkish tone. BMO sees Warsh staying non-committal on further hikes, framing today’s move as risk management aimed at avoiding larger increases later. BofA warned Warsh faces a difficult balancing act: signaling sequential hikes ahead could push markets to price in 100+ basis points of tightening, while a “dovish hike” risks undermining confidence in the Fed’s 2% inflation target.

If the Fed leaves interest rates unchanged today, it would mark the biggest shock to market expectations since 1994, according to The Kobeissi Letter. The warning comes as President Trump has threatened to “stop trading” with all countries the US runs a trade deficit with if the Fed doesn’t cut rates instead, a group representing roughly 50% of all US trading partners. The Fed’s decision is due within 40 minutes.

Despite markets pricing a 90% probability of a rate hike today, some market watchers remain unconvinced the Fed will follow through, suggesting political pressure from President Trump could still influence Fed Chair Kevin Warsh’s decision. Positioning ahead of the announcement reflects that uncertainty, with reactions prepared for either a rate hold or a hike.

itcoin is trading at $75,708.29, down 1.0% over 24 hours, after facing rejection near the $76,200 level. Analyst Michael Van de Poppe described the pullback as a technical correction, expecting a sweep of recent lows that could take Bitcoin toward $74,000, a level they said would become the area of interest for potential buying.

With the Fed facing significant political pressure, analysts are closely watching whether Wednesday’s decision draws broad support from committee members. July’s meeting saw three dissents from officials favoring a rate hike. Any visible disagreement today could complicate the narrative around Warsh, who Trump has suggested was reluctant to raise rates and was pushed by a hostile committee.

If the Fed raises rates today, it would mark a reversal of at least one of the three rate cuts delivered last year. The move carries added political weight since President Trump appointed Fed Chair Kevin Warsh earlier this year with expectations he would lower rates, not raise them.

Today’s Fed meeting marks Kevin Warsh’s third since taking over, but the first where he’s expected to raise interest rates rather than hold. Analysts are watching three key factors: whether the hike happens at all, given Trump appointed Warsh earlier this year expecting rate cuts; whether the decision is unanimous, after July’s meeting saw three dissents from officials wanting a hike; and how Warsh justifies the move, given markets have overwhelmingly priced in an increase based on his own recent commentary.

Chief Economist William Lee and Jeff Klingelhofer are both pricing in a 25 basis point rate hike today. Lee said the real surprise would be if the Fed admitted it was pressured into the move by market forces, arguing a “one-and-done” hike would suggest the Fed is acting mainly to save face. Klingelhofer said his biggest surprise would be Fed Chair Kevin Warsh fully embracing a strategy of keeping rates high to deliberately slow the economy. “The market won’t like that, but it might be what we need to bring inflation down,” he said.

Data cited in market discussion showed prices for full-service restaurants, home healthcare, and wireless services all running higher than a year ago. Commentators questioned how a Fed rate hike would meaningfully help ordinary consumers already struggling with rising costs in these areas, suggesting the move addresses market optics more than real household pressure.

Gold prices rose ahead of today’s Fed decision, with spot gold up 1.3% at $4,347.91 an ounce after touching a more than one-month low earlier in the week. US gold futures for December delivery gained 1.3% to $4,388.80, supported by a weaker dollar as traders positioned ahead of the announcement.

President Trump reiterated his push for lower interest rates just days before the Fed’s policy meeting, saying no country should have higher borrowing costs than the US. “Lower the rate or I’ll stop trading with countries with which we have a deficit,” Trump had earlier posted on social media, a threat he repeated over the weekend while speaking to reporters.

The Fed’s updated dot plot is expected to show rates ending 2026 near 4.1%, implying an additional hike beyond today’s anticipated 25 basis point increase. The bigger question centers on 2027, where projections may still signal eventual rate cuts even after this round of near-term tightening. Whether the Fed preserves that 2027 cut path could determine whether today’s overall message reads as hawkish or more balanced.

Investor and advisor Jeff Park is breaking from market consensus on today’s Fed decision, saying he believes Chair Kevin Warsh will hold rates steady even though markets are pricing a 90% probability of a hike. Based on Warsh’s belief system, Park called a hold the highest expected-value decision, while acknowledging he could be wrong. “Convexity is convexity when all the chips are down,” he said.

With the 10-year Treasury yield at or above 5%, market watchers say investors are looking for stronger signals from Fed Chair Kevin Warsh on the central bank’s long-term inflation plan. One CNBC reporter said their strategy for Wednesday’s press conference will center on Warsh’s opening statement rather than the Q&A, since it will offer the clearest early signal of how much guidance he’s willing to give, particularly given a live debate over whether long-end yields need this hike to finally form a ceiling.

A CNBC Fed survey found 76% of respondents expect a rate hike at this month’s meeting, with 55% anticipating more than one hike this year and a third seeing more than two hikes through July 2027. That brings total hike expectations for the year to 86%, more than double last month’s reading. The survey’s average inflation outlook for 2026 rose to around 3.5%, up from 2.7% before the Iraq war.

CFA analyst Milton Berg argues the Fed should keep rates unchanged rather than hike in response to rising Treasury yields and higher crude oil prices, giving the economy time to absorb the moves. He said an oil-price shock doesn’t necessarily signal accelerating monetary inflation, since higher energy costs also reduce consumers’ real disposable income and corporate purchasing power, creating a disinflationary effect elsewhere in the economy.

Traders are pricing in a 90% probability the Fed delivers a rate hike today, with roughly 100 basis points of total increases expected over the next 12 months. The real focus isn’t the hike itself but whether it signals a hawkish start to a new hiking cycle or a one-off insurance move, a distinction that hinges on the Fed’s updated dot plot and whether the decision is unanimous.

If the Fed delivers a hike alongside a credible path toward further increases, long-end yields could hold steady or even fall on improved inflation-fighting credibility. If instead it’s framed as a one-off insurance hike, longer-term yields could rise instead, as investors grow concerned about longer-term inflation expectations going unaddressed.

Global bond markets are under pressure, with the US, France, and Germany all seeing yields hit their highest levels in nearly two decades. The US 10-year yield has crossed the closely watched 5% mark, while oil prices continue edging higher on ongoing Middle East tensions and major stock indices tick lower ahead of today’s Fed decision.

Tom Lee said a Fed rate hike, if it happens, would likely be met calmly by equity markets, agreeing the move looks more like the Fed ceding to market pressure than its preferred course. He cited a Goldman Sachs study showing four factors distorting PCE inflation by 1.7 percentage points, from portfolio fees to tariffs and energy, arguing PCE is set to fall regardless of Fed action within six months. Lee remained bullish overall, saying markets have priced in hike expectations for weeks, with substantial cash still on the sidelines after consecutive down days, a setup he said could fuel a sharp rally.

The Fed’s rate decision lands at 2:00 PM ET today, with markets forecasting a move to 4.00% from the previous 3.75%. The FOMC statement and dot-plot release simultaneously at 2:00 PM ET, followed by Fed Chair Kevin Warsh’s press conference at 2:30 PM ET.

Bitcoin slipped to $75,521.32, down 1.6% over 24 hours, as crypto markets pulled back ahead of today’s Fed rate decision. Ethereum fell 3.4% to $2,388.22, while XRP led the declines, dropping 10% to $1.27 and down 11.2% over the past week. BNB eased 1.2% to $710.00. The broader retreat comes as traders position defensively heading into the FOMC announcement.

Markets are pricing a 95% probability of a rate hike at today’s FOMC decision. Since 2000, across more than 90 FOMC meetings, market expectations have proven wrong just five times, making today’s near-certain pricing a strong indicator of the outcome.