Federal Reserve Expected to Pause Rate Hikes This Month

Based on forecasts monitored by Polymarket, the Federal Reserve is no longer anticipated to increase interest rates during the upcoming FOMC meeting later this month. This shift follows statements from Fed officials indicating there is presently no hurry to implement another rate hike. On Thursday, Vice Chair Philip Jefferson noted that although he backed the central bank’s rate increase last month, he perceives no urgency for an immediate follow-up action.

“Any future adjustments in policy should be determined by carefully examining trends in the data, the evolving outlook, and the balance of risks,” Jefferson remarked in prepared text for a speech at the University of Virginia’s Darden School of Business. During its September 16 gathering, the Federal Reserve previously boosted its benchmark federal funds rate by 25 basis points, moving it to a target band of 3.75%–4.00%.

Concerns regarding a potential subsequent rate increase emerged this week as mortgage rates kept climbing. Driven by an ongoing global bond selloff, mortgage rates have ascended to their highest points since late 2023. Data from Mortgage News Daily shows the average 30-year fixed-rate mortgage hit 7.6% on Wednesday, marking an increase of about 15 basis points compared to the previous week. Such levels have not been observed since November 2023, with rates jumping by 70 basis points over the past month alone.

Even with pressure from the Trump administration to keep lowering interest rates, the Fed led by Kevin Warsh has maintained a holding pattern regarding drastic rate modifications, and its overall strategy stays difficult to decipher. Last month’s rate increase represented the initial move of its kind in a span of three years.

Frequently Asked Questions

Is the Federal Reserve expected to raise interest rates this month?

No, forecasts tracked by Polymarket indicate the Fed is no longer projected to hike interest rates at the upcoming FOMC meeting.

What did Fed Vice Chair Philip Jefferson say about future rate adjustments?

Jefferson stated that while he supported last month’s rate increase, he does not see any urgency for another move and believes future changes should rely on careful examination of data trends, the evolving outlook, and risk balances.

How have mortgage rates been affected recently?

Amid a global bond selloff, the average 30-year fixed-rate mortgage reached 7.6% as of Wednesday—the highest level since November 2023—after rising 70 basis points over the past month.