Forecasts monitored by Polymarket indicate that the Federal Reserve is no longer anticipated to raise interest rates during the upcoming FOMC meeting later this month. This shift follows statements from Fed officials suggesting there is presently no urgency to implement another rate hike. On Thursday, Vice Chair Philip Jefferson stated that although he backed the central bank’s rate increase last month, he perceives no pressing need for immediate further action.
“Any future adjustments in policy should be determined by carefully examining trends in the data, the evolving outlook, and the balance of risks,” Jefferson noted in prepared remarks for the University of Virginia’s Darden School of Business. During its September 16 meeting, the Federal Reserve most recently increased its benchmark federal funds rate by 25 basis points, bringing it to a target range of 3.75%–4.00%.
Concerns regarding an additional rate hike surfaced this week amid a continued climb in borrowing costs. As the global bond selloff persisted, mortgage rates ascended to their highest marks since late 2023. Data from Mortgage News Daily showed the average 30-year fixed-rate mortgage at 7.6% on Wednesday, marking an increase of about 15 basis points from the prior week. Such levels have not been recorded since November 2023, and rates have climbed by 70 basis points over the past month alone.
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Even with pressure from the Trump administration to push interest rates lower, the Fed under Kevin Warsh has refrained from making drastic alterations to rates, and its overarching strategy remains difficult to decipher. Last month’s rate increase marked the first occurrence of its kind in three years.