Minutes from the Federal Reserve’s September 15–16 meeting, released Wednesday, detailed a "broad debate" among policymakers despite their unanimous vote to raise interest rates by 25 basis points to a 3.75%–4.00% range. Chair Kevin Warsh characterized the move as "removing accommodation" to combat inflation, which the committee projected would average 3.7% in 2026. While a hawkish bloc argued for at least two additional hikes to reach a terminal rate above 4.1%, other officials advocated for a more "patient" approach following recent cooling in labor and price data.
Market reaction remained cautious as the 10-year Treasury yield held near 24-year highs at 5.35%. Major U.S. indices traded lower, with the S&P 500 down 0.4% and the Nasdaq down 0.7%, as investors weighed the Fed’s hawkish baseline against a softening economic outlook that has slashed the probability of an October rate hike to roughly 22%.