Federal Reserve Increases GDP Projections and Hints at More Rate Hikes

The Federal Open Market Committee unanimously raised the federal funds rate by 25 basis points to 3.75%-4.00% on September 17, 2026. Concurrently, the Federal Reserve updated its GDP growth forecasts, projecting 2.3% for 2026 and 2.4% for 2027, an increase from prior estimates. A majority of officials, 12 out of 18, also foresee at least one additional 25-basis-point rate hike later in 2026, indicating a continued hawkish stance on monetary policy and impacting borrowing costs and economic growth expectations.