BREAKING: Fed Unanimously Hikes Rates, One More Rate Hike On The Horizon

The U.S. Fed hiked rates by 25 basis points to 3.75%-4%.

The U.S. Federal Reserve hiked interest rates by 25 basis points (bps), or a quarter percentage point, on Wednesday amid elevated inflation and a strong job market. The Federal Open Market Committee approved the following statement for release by a 12–0 vote.

This move comes as the Fed pivots its attention to inflation amid energy price fluctuations from the conflict in Iran, while the job market remains resilient.

“Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient,” the Fed said in a policy statement. “Today’s policy action will support a timelier return to the Committee’s 2 percent goal.”

The typical Federal Reserve official projects underlying inflation reaching 3.4% as 2026 concludes, up slightly from the 3.3% estimate in June. Meanwhile, gross domestic product expansion is expected to reach 2.3%, up from the prior 2.2% projection.

How Markets Reacted To The Fed 

The S&P 500 was up 0.3%, Nasdaq 100 gained 0.7%, and the Dow Industrials fell 0.1% as of 2:10 PM ET.

Treasury yields dropped, calming off multi-year highs. The two-year yield eased nearly 1 basis point to 4.668%. The 10-year Treasury yield was down 5 basis points to 4.95%.

At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.3%, while the Invesco QQQ Trust (QQQ) gained 0.7%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bearish’ territory. 

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