Curious about today's AI digest?ai-tldr.dev
Pomegra LogoPomegra

Daily Digest

BriefMarket · mixedMedium impact
Esc
Minneapolis Fed President Neel Kashkari speaking on stage at a Milken Institute conference
Photo: Reuters via Investing.com

Fed Rates Seen Rising Twice More as Inflation Stays High

Federal Reserve Board2 min read6 sources

Will the Fed raise interest rates again in October?

Fed rates are likely to rise twice more, Kashkari told Reuters on Thursday, because inflation is still too high, with no firm view on whether October brings the next hike.

Key numbers

Fed target range3.75%–4.00%+0.25 pt on 16 Sep
Core inflation (PCE, Aug)3.0%below 3.3% forecast (per [4])
Headline inflation (PCE, Aug)3.4%below forecasts (per [4])
Kashkari's hike outlook1 in 2026, 1 in 2027no firm view on October

What happened

Fed rates are likely to rise twice more, Kashkari told Reuters on Thursday, because inflation is still too high, with no firm view on whether October brings the next hike. Kashkari, who leads the Minneapolis Fed, said the economy is doing better than expected and policy is probably not holding it back. His September forecast shows one more quarter-point hike this year and one in 2027. The Fed raised its rate to 3.75%–4.00% on 16 September. A softer August report put core inflation (prices excluding food and energy) at 3.0%, below the 3.3% expected.

Why it matters

The Federal Reserve, the US central bank, may not be done raising interest rates, according to one of its own policymakers. Higher rates make loans, mortgages and credit cards more expensive, and they pay savers more. Kashkari's view shows officials still see prices rising too fast, even after a softer inflation report. The next decision is on 28 October.

Who this affects

Marketmixed
Medium impact
Investors face the risk of higher borrowing costs for longer.
Companyneutral
Medium impact
Fed officials agree hikes continue but differ on timing.
Competitorsneutral
Low impact
ECB raised rates; Bank of England held with three votes to hike.
Industrybearish
Medium impact
Borrowers face costlier loans; savers may earn more.

Federal Reserve vs European Central Bank, Bank of England

Federal Reserve—3.75%–4.00%+0.25 pt (16 Sep)3.0% core PCE (Aug)
European Central Bank—2.50% (deposit)+0.25 pt (10 Sep)3.0% (2026 projection)
Bank of England—3.75%Held, 6–3 vote (17 Sep)3.1% CPI (Aug)

As of 2026-10-02

How we got here

  1. ECB raises its deposit rate 0.25 point to 2.50%.

  2. Fed votes 12–0 to raise rates to 3.75%–4.00%.

  3. August inflation comes in softer than expected; Kashkari says inflation is still too high.

  4. Kashkari tells Reuters he has no strong view on an October hike.

What to watch

  • Fed policy meeting and rate decision, where the next hike could come2026-10-28
  • Further inflation readings after the government changed how it measures some pricesOctober 2026

Educational content only. Not investment advice.

More briefsAll briefs →