Federal Reserve: Two more hikes seen as inflation stays too high – UOB
UOB’s economics team, led by Suan Teck Kin and Alvin Liew, interprets the September FOMC as the start of a short hiking extension rather than a one-off move.
The Federal Reserve announced two additional interest rate hikes, in December 2026 and Q1 2027, to combat persistent high inflation. This follows a series of hikes since June, with the Fed maintaining a 3.75-4.00% target range to bring inflation back to its 2% goal. The move is considered a short-term extension rather than a one-off change, and the Fed is not expected to stop at just two increases.
Analysts caution that factors like energy prices, trade tariffs, and AI could still lead to further tightening if inflation remains durable. The decision was unanimous, but the Fed avoided a back-to-back hike before the mid-term elections on November 3rd.
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