The Federal Open Market Committee expects to announce a 25-basis-point interest rate hike today. This move marks the first rate increase since July 2023. Markets price in a greater than 90% probability for the move. The central bank aims to address persistent inflation that remains above its 2% target.
U.S. retail sales rose a better-than-expected 1.2% in August. This growth signals robust consumer spending despite higher prices. Treasury yields have already reached 19-year highs ahead of the decision.
The Fed will release the announcement and updated economic projections at 2:00 PM ET. Fed Chair Kevin Warsh will hold a press conference following the release. Investors are monitoring the dot plot for signals regarding the future path of monetary policy. The decision will influence borrowing costs for consumers and corporations, directly affecting bank earnings outlooks.