Federal Reserve

Reuters reported that the U.S. two-year Treasury yield rose 14 basis points to 4.93 percent. CNBC reported that the two-year Treasury yield gained more than 10 basis points to 4.895 percent.

Odds of a quarter-point increase on 28 October rose to 43.7 percent from 22.1 percent the day before, on CME FedWatch pricing. Futures put a hold at about 49 percent, up from 19 percent before the report, leaving the meeting close to a coin flip between holding and raising.

The Federal Register published a presidential memorandum concerning a committee of inquiry into allegations against Lisa Cook. The memorandum directs the committee to conduct an in-person hearing on November 5, 2026.

Christopher J. Waller said he anticipated additional rate increases if economic data continued as expected. He said there was flexibility over when those increases would occur.

Federal-funds futures prices implied an 85 percent probability of at least one rate increase by the end of the Federal Open Market Committee’s December meeting. The same prices put the probability of two increases by that meeting at nearly 20 percent.

The September FOMC minutes disclosed discussion of preparing for possible Treasury-market dysfunction. Participants suggested strengthening the Federal Reserve's strategy, communications, and tools while limiting its footprint in the Treasury market.

Minutes of the September FOMC meeting said most participants expected another increase in the federal-funds target range would likely be appropriate by year-end. The minutes were released on October 7.

Jeffrey Schmid said the Federal Reserve remained focused on its short-term policy rate. He said the Fed had work to do on that rate.

The 10-year Treasury yield ended near 5.28 percent and the two-year Treasury yield near 4.83 percent. Reuters reported the 10-year yield at 5.281 percent and the two-year yield at 4.827 percent late in the session.

Federal-funds futures pricing implied a 22.7 percent probability of a quarter-point rate increase at the October FOMC meeting. Reuters reported that the probability had been 24.4 percent in the prior session and 64.2 percent a week earlier.

Donald Trump said he wanted Federal Reserve Chair Kevin Warsh to vote as Trump wanted on interest rates. The statement followed Warsh's participation in the September rate increase.

Vice Chair Philip N. Jefferson said future policy adjustments should be based on data trends, the outlook, and the balance of risks. He said he supported September's quarter-point increase and that policymakers may need more time to assess inflation's return to target.

Donald Trump said he would probably have voted against the Federal Reserve Board if he were Kevin Warsh. He said Warsh should have voted against the Federal Reserve's recent decision to raise interest rates while saying he did not hold Warsh personally responsible.

Austan Goolsbee said inflation remaining above target for five and a half years was "playing with fire." He said persistent supply shocks could require a policy response.

Michael S. Barr said his base case was that further policy adjustments would likely be needed to return inflation to target in a timely fashion. He said inflation risks had increased while labor-market risks had receded.

Lisa D. Cook said AI-related demand, higher oil prices, and Middle East supply disruptions would continue to pressure inflation in coming months. She said future rate adjustments would depend on the economy's response to the September increase and incoming inflation and labor-market data.

Michael S. Barr said further monetary-policy adjustments would probably be needed to return inflation to target in a timely fashion. He said strong growth, a solid labor market, and inflation above target had changed the balance of risks and led him to support the September increase.

Susan Collins said persistent inflation and renewed Middle East conflict were reasons she supported the September rate increase. She penciled in another rate increase later in 2026 and expected rates to remain unchanged in 2027.

The Federal Reserve Board unanimously raised the interest rate paid on reserve balances to 3.90%. The change took effect on September 17, 2026.

Donald Trump said he told Kevin Warsh to vote with the Federal Reserve Board because the outcome would not change. Axios reported Trump's statement on September 17.

Kevin Warsh said summer inflation readings did not show that underlying trends had meaningfully improved. Axios reported the statement on September 16.

In the projections issued with the decision, the median participant put the federal funds rate at 4.1 percent at the end of both 2026 and 2027, against 3.8 and 3.6 percent in the June round, and raised the median core PCE inflation projection for 2026 to 3.4 percent. With the target range just moved to 3.75 to 4.00 percent, the 2026 median implies one further increase this year; Axios counted 12 of 18 officials projecting it.

Investors priced an 85 percent probability of a rate increase at the Federal Reserve meeting ending the following Wednesday. Axios reported that CME's FedWatch estimate was 72 percent before that day's inflation data.

The two-year Treasury note yield rose 13.33 basis points to 4.56 percent. Reuters reported that this was its highest level since July 2024.

Traders priced a roughly 70 percent probability that the Federal Reserve would raise rates by 25 basis points at its September 15 to 16 meeting, up from 62 percent before the producer price data, according to LSEG interest rate probabilities.

Governor Christopher J. Waller said his September vote would depend principally on the August inflation data. He said continued inflation progress would incline him to support holding rates, while a hot reading could lead him to consider a rate increase.

Governor Michael S. Barr said he would favor raising interest rates if inflation did not appear to be moderating sufficiently. He said that progress toward the 2 percent inflation objective would support taking more time to assess the policy stance at the September meeting.

Mortgage News Daily's daily average for the 30-year fixed rate reached 6.87 percent, the highest of 2026, after Federal Reserve chair Kevin Warsh used his first Jackson Hole speech to say inflation progress over the past two years had been modest and that recent data did not suggest underlying trends had meaningfully improved. Markets read it as a signal that a rate increase was possible later in the year.

In his first Jackson Hole keynote, on his hundredth day as chair, Warsh declined to offer forward guidance or a reaction function, said this summer's better inflation readings did not show underlying trends had meaningfully improved, and set his standard as confidence that inflation is moving to target clearly and at sufficient speed. He also argued AI investment could lift growth substantially. Two-year yields jumped and futures moved to better than even odds of a September hike.

The Federal Reserve announced the leadership and objectives of five task forces on monetary-policy practice. The task forces will examine communications, balance-sheet policy, data, productivity and jobs, and inflation frameworks, with findings intended for the Federal Open Market Committee.

The June FOMC minutes said Kevin Warsh described plans to establish five independent task forces. The task forces were to examine issues related to the broad conduct of monetary policy.

Justice Clarence Thomas administered the oath in the East Room with Trump present, saying he wanted Warsh to be totally independent. The Fed noted that Trump had formally nominated Warsh on March 4, the Senate had confirmed him as a governor on May 12 and as chair on May 13, and that his term as chair runs to May 21, 2030, with a board term to January 31, 2040. The same day the FOMC unanimously chose him as its chairman.

The Federal Reserve Board named Jerome H. Powell chair pro tempore. Powell was to serve in that role until Kevin Warsh was sworn in as chair.

Chief Judge James E. Boasberg granted the Federal Reserve Board's motion to quash Justice Department subpoenas. The ruling concerned the Powell investigation.

Ending a search that had run since the summer of 2025 and considered nearly a dozen names, including governors Waller and Bowman, Trump announced on Truth Social that former governor Kevin Warsh, 55, would be his nominee for chair when Powell's term ended in May. Warsh, a Fed governor from 2006 to 2011 who had called for regime change at the central bank, would take the board seat held by Miran, whose term expired the next day. Gold and silver fell on the pick as markets read it as less of a threat to independence.

Jerome H. Powell said the Justice Department subpoenas were pretexts. The statement concerned subpoenas served on the Federal Reserve Board.

The chair of the Council of Economic Advisers took the oath as a Fed governor one day after a party-line Senate confirmation and two weeks after his nomination, filling Adriana Kugler's seat with a term ending January 31, 2026. He took unpaid leave from the White House rather than resigning, which drew criticism about the Fed's independence, and voted at the next day's meeting.

In a letter posted on Truth Social the president said he was removing Cook for cause, effective immediately, citing FHFA director Bill Pulte's allegation that she had claimed two primary residences in 2021. No president had ever removed a Fed governor. Cook said no cause existed and she would not resign, hired Abbe Lowell and sued; a district court and the D.C. Circuit let her keep her seat while the case went to the Supreme Court.

In his final Jackson Hole speech as chair Powell said the labour market was in a curious kind of balance with both supply and demand for workers slowing, that tariff effects on prices were now visible, and that with policy restrictive the baseline outlook and the shifting balance of risks might warrant a change in stance. The Fed also released its revised framework, dropping the 2020 average inflation targeting language. Markets took it as a signal for a September cut.

The FOMC maintained the target range for the federal funds rate at 4.25 to 4.5 percent. The Federal Reserve published the statement on May 7, 2025.

Beginning in April, the FOMC reduced the monthly redemption cap on Treasury securities from $25 billion to $5 billion. The Federal Reserve published the statement on March 19, 2025.

The FOMC maintained the target range for the federal funds rate at 4.25 to 4.5 percent. The Federal Reserve published the statement on January 29, 2025.

The FOMC lowered the target range for the federal funds rate by 25 basis points to 4.5 to 4.75 percent. The Federal Reserve published the statement on November 7, 2024.