Market history · Central banks ·
The Fed turns: from a cutting debate to a rate rise
At its 28 January 2026 meeting the Federal Open Market Committee held its target range at 3.50–3.75%, with two members, Stephen Miran and Christopher Waller, preferring a quarter-point cut. Kevin Warsh was sworn in as Fed chair on 22 May, succeeding Jerome Powell as chair.
By summer the argument had reversed. On 29 July the Committee again held at 3.50–3.75%, this time by 9–3, with Beth Hammack, Neel Kashkari and Lorie Logan preferring a quarter-point increase. On 16 September 2026 it raised the target range by a quarter point, to 3.75–4.00%, by a unanimous 12–0 vote.
The shift followed the Fed chair's August acknowledgement that recent inflation data had not meaningfully improved, in a year when oil prices had been disrupted by the conflict involving Iran. For investors it was another reminder that a policy path expected at the start of a year can look very different by the end of it.
The takeaway
Interest-rate expectations change within months; portfolios built on one forecast for rates are fragile.
Sources
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