Week of September 21: three voters put another hike on the table, and none will date it
Three of the twelve FOMC voters put another rate increase on the table this week, each attaching a condition and none a date, while the chairman made no public appearance of his own.
The Federal Open Market Committee raised its target range for the federal funds rate to 3.75%–4.00% on September 16, on a 12–0 vote. 1
In the seven days that followed, three of its twelve voting members put another increase on the table in public. Two called it likely in their own words. The third attached a condition. None named a date. New York Fed President John Williams called a further hike by year-end "a reasonable way of thinking about it." Governor Michael Barr said "further policy adjustments are likely to be needed." Philadelphia Fed President Anna Paulson wrote that "some modest further tightening may be warranted." 234
Chair Kevin Warsh made no public appearance at all between the September 16 meeting and the close of this window, and he had already told reporters why: "My business is to not give forward guidance." 56
The arithmetic behind the three statements was already published. Sixteen of the eighteen participants who submitted September projections expected at least one more increase this year, and the median path holds the funds rate at 4.1% through 2027 before its first step down in 2028. 37 What the week added was names, a stated reason for each, and a refusal to schedule the move.
Markets supplied the dates the officials withheld. Short-term interest-rate futures moved from about 55% to roughly 70% for an October increase on September 23, the day Barr spoke, and settled near 66% for October and 93% for December by Friday. 38 The benchmark 10-year Treasury yield rose back above 5%, a level last reached in 2007, and the dollar index ended the week near a two-month high. 39
The signal table
Three label values in the table need defining. No new signal means the member published no qualifying monetary-policy communication in the September 21–28 window. No monetary policy signal marks a public appearance whose published text covers supervision or market operations, and it carries no tone read. Signal gap marks a position that moved with no published explanation of why.
The table covers the twelve current voting members of the Federal Open Market Committee, and Reserve Bank presidents without a 2026 vote sit outside this digest. 10 Several of those presidents discussed inflation during the same week. 11
| Voting member | Role | Window result and source | Tone read | Policy signal and asset implication |
|---|---|---|---|---|
| Kevin Warsh | Chair, Board of Governors | No appearance or release in the window; the Board's speeches archive and calendar record nothing from him after the September 16 press conference. 1213 | No new signal | He set a standard for acting — confidence that "underlying inflation is moving to our objective, clearly and at sufficient speed" — and supplied neither a reading of it nor a path this week. 5 With the chair silent, the front end prices the other eleven. |
| John C. Williams | Vice Chair, New York Fed | September 24: remarks at a National Institute of Economic and Social Research conference in London. September 22: "Do You Remember?" at the New York Fed's 2026 U.S. Treasury Market Conference, on market structure and policy implementation. 214 | Hawkish | "It's likely that another rate hike may be appropriate by the end of the year. That seems to me a reasonable way of thinking about it." He tied the timing to data rather than a plan, saying the committee would "collect the data and do what we did between July and September." His September 22 speech stayed on implementation — interest rate control, low opportunity costs, elasticity — and carries no rate-path read. |
| Michael S. Barr | Governor, Board of Governors | September 23: "A Long-Term View on the Costs of Shelter" at the Chicago Fed's Housing Affordability 2026 summit, which opens with his monetary-policy view. 15 | Hawkish | "Inflation is above our 2 percent target and not clearly trending toward target in a timely way" and "in my base case, further policy adjustments are likely to be needed." He called the September move a correction: "we were out of position, and we made an adjustment in the right direction." |
| Michelle W. Bowman | Vice Chair for Supervision, Board of Governors | No qualifying remark in the window. She is scheduled to speak on supervision on September 28 and September 29, after this issue's close. 12 | No new signal | Her September 18 London speeches covered stress testing and the Silicon Valley Bank review, and her next appearances fall outside this window. |
| Lisa D. Cook | Governor, Board of Governors | No qualifying remark in the window. She is scheduled to speak on artificial intelligence and emerging technology on September 28 and on the rural economy on September 30. 12 | No new signal | Nothing new to price from her this week; the September statement carries her vote. |
| Beth M. Hammack | President, Federal Reserve Bank of Cleveland | September 24 and 25: remarks at the Cleveland Fed's Inflation: Drivers and Dynamics conference, reported by Reuters on both days. 1617 | Hawkish | "The inflation outlook continues to be highly uncertain, with risks tilted to the upside," and "the longer that high inflation persists, the more challenging and costly it can be to bring it back down." On the stance she went further than a diagnosis: "we need to make sure that policy is at a restrictive stance to help bring things back down to target." She gave no specific rate recommendation. |
| Philip N. Jefferson | Vice Chair, Board of Governors | September 22: "Discount Window Modernization and Treasury Market Functioning" at the New York Fed's 2026 U.S. Treasury Market Conference. 18 | No monetary policy signal | The text covers discount window operations and Treasury collateral, and records heavier discount window use "amid periods associated with temporary upward pressure on money market rates, such as those observed at quarter-ends." It stays with market operations and Treasury collateral. |
| Neel Kashkari | President, Federal Reserve Bank of Minneapolis | No qualifying remark in the window; his Fox News interview of September 20 falls in the previous issue's window. 12 | No new signal | His September 20 argument — that inflation is too high beyond energy, in services especially — remains his last substantive contribution. |
| Lorie K. Logan | President, Federal Reserve Bank of Dallas | No qualifying remark in the window. The Dallas Fed's speech archive lists nothing from her after July 31. 19 | No new signal (prior: hawkish) | Signal gap. She voted in July for the increase that was delivered on September 16 and has published no account of what satisfied her, leaving her reaction function unstated for the next round. |
| Anna Paulson | President, Federal Reserve Bank of Philadelphia | September 24: "Opening Remarks" at the Philadelphia Fed's 10th Annual Fintech Conference. 4 | Hawkish | "That's why I supported raising the federal funds rate by 25 basis points at last week's meeting... Looking ahead, if conditions evolve as I expect, some modest further tightening may be warranted." She put underlying inflation at "a range of about 2.5 to 3 percent" and called the return to 2% "non-negotiable." |
| Jerome H. Powell | Governor, Board of Governors | No appearance or release in the window. 12 | No new signal | Nothing new from the former chair this week. |
| Christopher J. Waller | Governor, Board of Governors | No qualifying remark in the window; he is scheduled to speak on payments at the Sibos conference on September 29. 12 | No new signal (prior: conditional) | His September 3 condition — a hold if disinflation continued, a hike if improvement proved fleeting — was overtaken by the September hike, and he has published no account of which leg decided it. |
Three voters, three conditions, no date
Barr: a housing speech with a rate call inside it
Barr titled his remarks after shelter costs, and the first substantive section is monetary policy. He listed the shocks the economy has absorbed over the past eighteen months — tariffs, the conflict in the Middle East, Russia's war on Ukraine, and the investment surge behind the artificial intelligence buildout — and concluded that together they have added to price pressure rather than passing through. 15
His reading of the risk balance has moved. "Risks to achieving our inflation target have increased, while risks to the labor market have receded," he said, and then: "In my base case, further policy adjustments are likely to be needed to ensure inflation comes down to target in a timely fashion." He described the September increase as a correction of position rather than the start of a campaign: "given changes to the economy, we were out of position, and we made an adjustment in the right direction." Reuters read the remark as implying at least two more increases, with no timetable attached. 3
The housing half of the speech supplies data the committee will need. Barr put shelter inflation at about 2¾% a year — well down from its 2022–23 pace, and still above the rate consistent with 2% overall. He reported that the consumer price index for rent of primary residence sits 34% above its December 2019 level; that roughly half of all mortgages carry rates of 4% or lower and nearly 80% sit below 6%; and that the Atlanta Fed's Home Ownership Affordability Monitor fell to 68 in July, its lowest reading in 21 years. 15
He also described the lock-in effect as cutting both ways. Those low-rate mortgages keep existing owners from selling, which reduces supply; the same rates keep marginal buyers out, which reduces demand. His speech leaves the net price effect open. 15
Williams: the market's arithmetic, called reasonable
Williams spoke in London on September 24, and he began from what traders already had priced. "Forecasts among market participants showed investors thought 'it's likely that another rate hike may be appropriate by the end of the year. That seems to me a reasonable way of thinking about it,'" he said. 2
His stated reason is about speed rather than direction. "We really want to see not only inflation get back to 2%, which is absolutely essential to achieve that, but also we want to see that happen... in a timely manner," he said. He called inflation the "big challenge" for a committee balancing growth against prices, and said the world economy has held up better than expected against the energy-price shock from the Iran war. 2
On timing he pointed back to the process rather than forward to a date. September's increase, he said, came from an accumulation of pressures rather than a single data release, and the committee would "collect the data and do what we did between July and September." 2
Two days earlier, at the New York Fed's Treasury Market Conference, he had given an implementation speech, "Do You Remember?", on how market-structure change feeds back into how the Fed steers the funds rate. Its themes were interest rate control, low opportunity costs for holding reserves, and elasticity in the quantity of reserves. 14
Paulson: the condition, written down
Paulson published the condition with the call, which makes her text the most specific of the three. She measured underlying inflation — the part of price growth left after shocks expected to fade — at 2.5% to 3%, and said that gap "has shown little sign of closing." Her evidence for demand-driven pressure is the buildout she can see from Philadelphia: import prices for computers and computer accessories have risen 24% over the past twelve months, and she quoted one technology company describing pressure moving from circuit boards to capacitors. 4
"Looking ahead, if conditions evolve as I expect, some modest further tightening may be warranted," she wrote, adding that "returning inflation to 2 percent is non-negotiable, and I will support the policy path that gets us there while carefully weighing risks to the labor market along the way." 4
The labor side of her case is what gives her the room. Unemployment sits at 4.1%, which she called consistent with maximum employment; job gains averaged a solid 74,000 a month over the summer and have broadened beyond healthcare and social assistance; and wage growth has stayed modest enough that she described labor costs as an unlikely driver of prices. 4
Hammack supplies the inflation case
Beth Hammack dissented in July for the increase that arrived in September. This week she published the inflation half of her reasoning. 16
"Current conditions in the United States indicate that output is growing at a solid pace and the labor market remains close to my definition of maximum employment, but inflation remains elevated," she said. "The inflation outlook continues to be highly uncertain, with risks tilted to the upside," and "the longer that high inflation persists, the more challenging and costly it can be to bring it back down." 16
A day later she moved from the diagnosis to the stance. The chief risk she named is that "an inflationary mindset could start to set in" after more than five years above target, and the remedy she described is directional: "we need to make sure that policy is at a restrictive stance to help bring things back down to target." She added that she does not see the current stance restraining business investment outside housing, where firms keep investing. 17
That last observation answers, from the hawkish side, a question Warsh left open on September 16 when he said he would be "hard pressed to describe broad financial conditions as restrictive." 5
She also offered a read on the bond selloff that bears on the long end. Real yields have risen by more than inflation expectations, she said, and the climb reflects a solid growth outlook, competition for investor cash from technology investment, and investors repricing the policy path. 17
Reuters recorded that she stopped short of saying what she wants the committee to do on rates. 17 For anyone counting votes, what she published is a direction for the stance with no size and no date attached.
The chair said nothing
Warsh's absence is the week's second fact, because the gap between him and his colleagues now describes the committee's communication. Three voters named another increase and a fourth argued the stance still has to become restrictive, while the chair who prefers that officials say less about the future said nothing at all. 6
He has ruled out the two conventions a reader would use to bound the path. At his September 16 press conference he declined to define the neutral rate in operational terms, described data-point dependence as "a dangerous preoccupation," and declined to submit his own projection. 5
What remains is a committee whose members publish their own reaction functions while the chair keeps his unstated. That shifts the burden onto data releases, because each voter has said what would move them and none has said how soon.
Jefferson on the discount window
Philip Jefferson's September 22 speech is official, published, and delivered by a voting member at a conference his own institution hosted. Its subject is the plumbing. 18
He described three lines of work. Collateral administration is now standardized across the twelve Reserve Banks, with common loan valuation models, electronic signatures and simplified pledging forms. The Discount Window Direct portal, launched in 2024, now takes more than 60% of loan requests. And the Reserve Banks have built interoperability with the Federal Home Loan Banks so collateral can be reallocated faster between the two systems. 18
One passage bears on short-term funding rather than the policy stance. Jefferson said the central bank has "recently seen more use of the discount window amid periods associated with temporary upward pressure on money market rates, such as those observed at quarter-ends," and that the facility complements standing repo operations in relieving funding pressure. 18 Heavier quarter-end borrowing at the window speaks to how reserves are distributed across banks; the committee's preferred level for the funds rate is a separate question.
What the market did with the week
Pricing did the dating the officials declined to do. Two houses' readings of the same futures curve are quoted below, and they differ by a point or two.
- The October 27–28 meeting. Interest-rate futures moved from about 55% to roughly 70% for an increase during September 23, the day Barr spoke, and LSEG data put the odds above 60% on September 24. By Friday, CME's FedWatch tool had October at 66% and December at 93%. On Monday morning the October reading sat at 65%. 38920
- The long end. The 10-year Treasury yield rose back above 5% on September 23, its highest since 2007, and reached a fresh 19-year high later in the week; the 30-year touched its highest level in more than 20 years. Weak demand at a 5-year note auction pushed that maturity to its own 19-year high. 3820
- The dollar. The index sat at 101.12 on Monday morning, near a two-month high and up 1.7% in September for its best month since June. The euro hovered at $1.1386, close to a two-month low. 9
- Gold. Spot gold closed Friday at $4,282.98 an ounce, down about 2.1% on the week — its fourth weekly decline in five, and roughly 19% below its February peak. 8
- Equities. The S&P 500 held less than 1% below its mid-August record and was up about 13% for the year. Underneath, breadth thinned: eight of eleven sectors were negative in September, and an equal-weight version of the index was down about 4%. 20
- Housing and the week's data. The average 30-year fixed mortgage rate rose to 7.12%, a two-year high. 3 S&P Global's flash US composite output index rose in September to its highest since July 2021, and the survey's measure of prices paid for inputs jumped to a nearly four-year high. 3
- The energy backdrop. Brent crude traded near $101 a barrel on September 23 and rose above $107 on Monday after President Trump rejected a peace deal with Iran. 39
Asset implications
The matrix maps this week's signals onto each market and names the observation that would overturn the read. These are conditional sensitivities rather than recommendations.
| Asset or market | What this week's signals imply | What would reverse it |
|---|---|---|
| Front-end rates | Three voters have told the market what the median projection already said, and futures now price roughly two increases through December. With no voter offering a date, each inflation and labor release carries a larger marginal weight than the last. 8 | Two consecutive monthly core PCE prints consistent with the 2.3% median for 2027, or an unemployment rate clearly above the 4.1% median, would shift the distribution back toward the June path. 7 |
| Treasury curve | The move was at the long end rather than the front. The 30-year reached a 20-year high while the policy rate sits at 3.75%–4.00%, which points to term premium and supply as much as the policy path. Both Warsh and Hammack attribute the rise to growth, technology capital demand and geopolitics. 17 | Long-end relief needs inflation decelerating while the growth impulse fades. Softer activity with sticky prices is the combination the September projections assign no weight to, and it would steepen the curve quickly. |
| U.S. dollar | The index is near a two-month high with a policy cycle that three voters have extended. Relative policy at the margin supports the move: the Bank of England has warned on a hike, Australia is expected to raise on Tuesday, and the Bank of Japan is debating faster increases. 9 | A visible turn in the U.S. labor market, or another central bank accelerating past the Fed, would compress the differential that has been supporting the dollar. |
| Equities | Higher discount rates and a terminal rate above the longer-run value argue for continued multiple pressure, and the September breadth figures show it landing on the average stock rather than the index. The September projections marked growth up and unemployment down, which argues against an earnings-led selloff. 720 | The payrolls report due October 2 is the near-term test. A very hot print would cement the October hike and pressure the AI-linked leaders that have carried the index; a soft one would relieve the discount-rate pressure. |
| Credit and risk assets | Mortgages are the fastest transmission channel, with the 30-year fixed at 7.12%. Gold has fallen about 19% from its February peak, which shows real yields doing the work on non-yielding assets. 38 | A policy rate held above 4% through 2027 is the slower-moving credit risk, and it eases only if a disinflation turn restores a 2027 cut to the path. |
Where the week leaves the committee
The collective tone has moved on from whether to tighten. Three voters named another increase, and the July dissenter with the longest hawkish record said policy still has to reach a restrictive stance. 21517
Two things hold these statements together, and both are absences. The first is the missing date: Williams wants the data, Paulson wants conditions to evolve as she expects, Barr gave no timetable, and the chair has ruled the question out of bounds. 5 The second is the missing explanation from the voters who moved most. Hammack and Logan both dissented in July for exactly the increase delivered on September 16. Hammack has now published the case behind her vote; Logan has published nothing since July 31. That is a signal gap, and it leaves the committee's hawkish wing with one stated reaction function and one unstated. 19
Set against the September projections — sixteen of eighteen participants behind at least one more increase, and a median path with no reduction until 2028 — the week produced no new committee position. It produced individual reaction functions that agree with the median and refuse to schedule it. 37
The next four weeks carry three specific tests. The August PCE report is due September 30, and it will show whether the underlying measure Paulson places at 2.5% to 3% is moving. The September employment report follows on October 2, with economists polled by Reuters expecting 100,000 jobs and an unemployment rate of 4.2%. 20 Both land before the October 27–28 meeting, where the chair will face the standard he set seven weeks earlier. 1
References
- 1Federal Reserve issues FOMC statement, September 16, 2026
federalreserve.gov
- 2
- 3
- 4
- 5Transcript of Chairman Warsh's Press Conference, September 16, 2026
federalreserve.gov
- 6
- 7September 16, 2026: FOMC Projections materials, accessible version
federalreserve.gov
- 8
- 9
- 10Federal Open Market Committee, Board of Governors
federalreserve.gov
- 11
- 12Federal Reserve Board calendar
federalreserve.gov
- 132026 Speeches, Federal Reserve Board
federalreserve.gov
- 14Key Takeaways from President Williams's Speech at the 2026 U.S. Treasury Market Conference (New York Fed)
tellerwindow.newyorkfed.org
- 15Speech by Governor Barr on housing, September 23, 2026
federalreserve.gov
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- 18
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