# Fed Minutes Show 2% Inflation Is Not a Rate-Hike Trigger

By Riza Dagoc

Canonical URL: https://www.tokenpost.com/news/regulation/29421
Published: 2026-10-10T07:05:20.000Z
Updated: 2026-10-10T07:05:20.000Z
Section: Regulation

> Most officials still expected another increase by year-end after the Federal Open Market Committee raised rates to 3.75% to 4%.

Federal Reserve officials do not view reaching their 2% inflation goal as a required trigger for either another interest-rate increase or a pause, but most still expected one more hike by year-end.

The Federal Open Market Committee unanimously raised its federal funds target range by 25 basis points to 3.75% to 4% at its Sept. 15-16 meeting, effective Sept. 17. The minutes, released Oct. 7 at 2 p.m. ET (1800 UTC), showed policymakers remained divided over how much additional tightening the economy may need.

Most participants judged another increase would likely be appropriate by year-end. They also emphasized that future decisions would depend on incoming information and the balance of risks. “Participants approached each meeting with an open mind,” the Federal Open Market Committee minutes said.

The Fed’s longer-run inflation objective is 2%, measured by the personal consumption expenditures price index. Staff estimated August 12-month PCE inflation at 3.8% and core PCE inflation at 3.4%. A planned methodology change by the Bureau of Economic Analysis would have produced estimates of 3.6% and 3.2%, respectively.

Staff projected inflation would reach 2% in 2029 while economic growth remained stronger and unemployment stayed below its estimated longer-run rate through that year. In both July and August 2026, unemployment stood at 4.1%.

Inflation risks remained tilted upward because of energy prices, tariffs, artificial intelligence-related investment and elevated price increases in some services and goods. Consumer spending and business investment remained solid, even as higher borrowing costs strained parts of the economy.

The minutes did not establish whether officials will raise rates or hold them steady at the October meeting. They also did not set a specific inflation reading that would determine the next policy move.

The FOMC’s policy framework leaves the 2% goal as a longer-run objective rather than a mechanical threshold for every decision. Officials are weighing continued price pressures alongside economic growth, labor-market conditions and the effects of restrictive borrowing costs.

“The Committee will deliver price stability,” the statement approved Sept. 16 said. The next FOMC meeting is scheduled for Oct. 27-28.