{"id":71867,"date":"2026-09-16T14:38:10","date_gmt":"2026-09-16T18:38:10","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/fed-hikes-rates-to-4-00-and-signals-higher-for-longer-through-2028\/71867\/"},"modified":"2026-09-16T14:38:10","modified_gmt":"2026-09-16T18:38:10","slug":"fed-hikes-rates-to-4-00-and-signals-higher-for-longer-through-2028","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/fed-hikes-rates-to-4-00-and-signals-higher-for-longer-through-2028\/71867\/","title":{"rendered":"Fed Hikes Rates to 4.00% and Signals &#8220;Higher for Longer&#8221; Through 2028"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>The Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75%-4.00%<\/strong>, marking a unanimous decision to accelerate the return to its 2% inflation target.<\/li>\n<li><strong>Updated &quot;Dot Plot&quot; projections show 12 of 18 officials expect one more rate hike in 2026<\/strong>, with the median long-run rate forecast rising to <strong>3.25%<\/strong> from <strong>3.063%<\/strong>.<\/li>\n<li><strong>Economic forecasts for 2026 were revised<\/strong>, with policymakers now projecting <strong>PCE inflation at 3.7%<\/strong>, <strong>GDP growth at 2.3%<\/strong>, and <strong>unemployment holding steady at 4.1%<\/strong>.<\/li>\n<li><strong>The U.S. Dollar Index (DXY) rose 0.15% to 99.83<\/strong> following the hawkish outlook, while major indices like the <strong>Nasdaq (+0.6%)<\/strong> and <strong><a href=\"https:\/\/stockmarketwatch.com\/indices\/sp500\/today\" data-internallinksmanager029f6b8e52c=\"3\" title=\"snp500 today\">S&amp;P 500<\/a> (+0.2%)<\/strong> initially held onto gains.<\/li>\n<li><strong>Goldman Sachs (<a href=\"\/stock\/GS\">GS<\/a>) CEO David Solomon<\/strong> signaled internal optimism, stating he expects growth in the firm\u2019s Asset &amp; Wealth Management division to <strong>outpace its high-single-digit target<\/strong>.<\/li>\n<\/ul>\n<p>The Federal Open Market Committee (FOMC) delivered a <strong>25-basis-point interest rate hike<\/strong> on Wednesday, bringing the federal funds rate to a <strong>3.75%-4.00% range<\/strong>. The committee noted that economic activity is expanding at a <strong>&quot;solid pace&quot;<\/strong> and domestic spending remains resilient despite elevated global uncertainty.<\/p>\n<p>In a significant shift, the Fed&#39;s Summary of Economic Projections (SEP) revealed a &quot;higher-for-longer&quot; stance that exceeded previous market expectations. Median rate forecasts were revised upward to <strong>4.1% for the end of 2026 and 2027<\/strong>, and <strong>3.9% for 2028<\/strong>, suggesting that restrictive policy will remain in place for several years to combat persistent price pressures.<\/p>\n<p>The central bank&#39;s outlook for inflation remains cautious, with <strong>2026 PCE inflation projected at 3.7%<\/strong> and <strong>core PCE at 3.4%<\/strong>. Despite these headwinds, the Fed highlighted <strong>strong productivity growth<\/strong> and <strong>robust capital investment<\/strong>, dropping previous language that attributed inflation to temporary supply shocks.<\/p>\n<p>Market reaction was immediate as the <strong>U.S. Dollar Index<\/strong> climbed, pushing the <strong>Dollar\/Yen<\/strong> pair up <strong>0.1% to 155.24<\/strong>. Conversely, the <strong>Euro<\/strong> fell <strong>0.21% to $1.1517<\/strong> and <strong>Sterling<\/strong> dropped <strong>0.33% to $1.3432<\/strong> as traders priced in the likelihood of at least one more U.S. rate hike before the end of the year.<\/p>\n<p>U.S. equities remained resilient in the minutes following the announcement, led by a <strong>1.9% surge in the Chip Index<\/strong>. Investors appeared to take solace in the Fed&#39;s <strong>2.3% GDP growth forecast<\/strong>, which suggests the central bank still believes a &quot;soft landing&quot; is achievable despite the higher interest rate trajectory.<\/p>\n<p>Outside of the Fed decision, Goldman Sachs (<a href=\"\/stock\/GS\">GS<\/a>) captured investor attention as CEO David Solomon expressed confidence in the firm&#39;s pivot toward recurring fee income. Solomon noted that the bank&#39;s <strong>Asset &amp; Wealth Management<\/strong> segment is poised to exceed its growth targets, providing a bullish counter-narrative to the broader tightening environment.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways The Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75%-4.00%, marking [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":50383,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"rank_math_schema_Article":[],"rank_math_focus_keyword":[],"rank_math_description":[],"financial_data_references":[],"stock_symbols_mentioned":[],"footnotes":""},"categories":[5012],"tags":[2037,3710,3880,3966,4222,4223,4306,4380,5300],"class_list":["post-71867","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-breaking-news","tag-us-dollar","tag-federal-reserve","tag-fomc","tag-sep","tag-interest-rates","tag-inflation","tag-dxy","tag-stock-market","tag-goldman-sachs-gs"],"_links":{"self":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/posts\/71867","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/comments?post=71867"}],"version-history":[{"count":0,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/posts\/71867\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/media\/50383"}],"wp:attachment":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/media?parent=71867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/categories?post=71867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/tags?post=71867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}