LIVE: Fed Reserve FOMC Meeting Outcomes Today, Check Timing; Dow Jones, Nasdaq, S&P 500 Futures Surge
The US Federal Reserve's 2-day meeting outcomes will conclude on September 16, 2026, followed by press conference of FOMC chair Kevin Warsh. The market is predicting a 25 bps rate hike from FOMC on Wednesday due to energy crisis and rising treasury yields, which puts pressure on headline inflation. The Fed has kept rates steady at 3.5% to 3.75% since January 2026, after a series of cuts that followed from 2023.
The Fed is expected to deliver a hawkish monetary policy, with rates rising to 3.75% to 4% eventually.
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What do we know so far? August's jobs report came hotter than expected in Bloomberg's survey of economists, and headline inflation remained above the FOMC target at 3.4%, with core CPI rising 0.29% on a month-on-month basis.
Meanwhile, crude oil prices remain elevated, testing towards the $110 per barrel mark, and the US 10-year treasury yields have crossed 5%, which is its highest level since 2007. Also, the geopolitical crisis in West Asia remains a drawback, putting further pressure on the Fed.
The Federal Reserve is expected to raise the target range for the federal funds rate by 25bps to 3.75%-4.00% in September 2026, marking the first rate hike since 2023, as inflation remains well above target and the energy shock stemming from the war with Iran continues to weigh on the outlook. US headline inflation held at 3.4% year-on-year in August, while core inflation was at 2.4%. Meanwhile, diesel prices have risen to $6 a gallon, adding further pressure to the inflation outlook as an end to the conflict appears increasingly distant. In his Jackson Hole speech last month, Chair Warsh said that if the Fed was not confident that underlying inflation was declining, it would have "work to do". Policymakers will also release updated economic projections. In June, the so-called dot plot showed that nine officials expected at least one rate hike this year, while six anticipated at least two. Chair Warsh did not submit a forecast at the time, as per Trading Economics.
Ahead of the Fed policy, the Dow Jones, Nasdaq, and S&P 500 futures are trading higher despite Wall Street ending in red yesterday.
On Tuesday, the Dow Jones Industrial Average index plunged by 328.09 points, or 0.63% to close at 52,093.11. Also, the Nasdaq Composite index dropped by 204.84 points or 0.78% to close at 25,981.57. Lastly, the S&P 500 slipped by 34.25 points or 0.45% to end at 7,585.73.
If Fed hikes its federal fund rates, then it will be first hike in 3 years.
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