16 September 2026
If you are covering the Federal Reserve's decision to unanimously raise interest rates, please find below a comment from Richard Carter, head of fixed interest research at Quilter Cheviot:
“For the first time in more than three years, the Federal Reserve has unanimously voted to raise interest rates, as the conflict in the Middle East takes its toll on the American economy. This move higher had been coming and the Fed arguably held it off for as long as they could. However, with energy prices taking a renewed step higher and inflation remaining persistently well above target, it was inevitable that the Central Bank would need to take this step.
“This is a pivotal moment for Kevin Warsh too. He was brought into the Fed as Trump’s guy, poised to deliver the rate cuts he so desperately wants. However, his first move of significant impact is in fact an interest rate rise, and this risks hampering the relationship between the two and thus a repeat of the barbs Jerome Powell suffered during his tenure. Warsh will be hoping this action is swift, although energy prices are ultimately what is driving inflation right now rather than what is going on within the US economy.
“Indeed, going forward the Fed will want to see tensions in the Middle East calm significantly and for a considerable period of time before it can start to look past this inflation spike. Inflation in the US has refused to come back down to target ever since the pandemic and today’s decision confirms that we are very much in a higher for longer period. For now, Warsh is backing up his words that the Fed has ‘work to do’ on inflation, but soon he will need to consider for how long this work is likely to take.”
