The Federal Reserve and the FOMC

The Federal Open Market Committee is the monetary policy-setting body of the Federal Reserve (the Fed). It meets eight times per year, with four of those meetings producing a Summary of Economic Projections (SEP) and dot plot: March, June, September, and December. The September meeting is a pivotal one in the annual calendar. It comes after the summer data flow, covering Q2 GDP and July-August inflation and employment readings, and it sets up the final two meetings of the year (October and December). It is at September meetings that the Fed has historically made some of its most significant policy pivots, as the committee can draw on a full half-year of data to assess whether the pace of disinflation or growth slowdown warrants action.

The FOMC’s dual mandate is maximum employment and price stability. The Fed targets headline PCE inflation at 2% over the longer run, and the September SEP will include updated projections for PCE and core PCE inflation, real GDP growth, unemployment, and the federal funds rate path. These projections are the closest thing the Fed publishes to a formal policy commitment, though they are not binding and can be revised at subsequent meetings.

FOMC September Meeting: September 15-16, 2026

The September 2026 meeting is one of the most consequential of the year. By September, the committee will have data through August 2026 for all major indicators: CPI, PCE, NFP, retail sales, and GDP (including the Q2 2026 advance estimate due in late July). This rich data set will allow the FOMC to make an informed decision about whether the inflation trajectory and economic growth have evolved sufficiently to justify either a rate cut or a continued hold.

The March 2026 SEP, the most recent available at the time of writing, indicated just one rate cut expected in all of 2026. If the June and September SEPs maintain or shift this projection, markets will adjust their rate expectations accordingly. A September SEP that shows two cuts now expected in 2026 (implying one at either September or a later meeting) would be interpreted as a dovish shift, likely boosting equities and Treasuries. A SEP with zero expected cuts in 2026 would be hawkish and push yields higher. The decision will be announced at 2:00 p.m. EDT, with Fed Chair Powell’s press conference beginning at 2:30 p.m. EDT.

What to Expect

Whether the FOMC cuts, holds, or hikes at September 2026 depends on a data flow that has not yet occurred. The key variables are the trajectory of core PCE inflation, the strength of the labour market, and GDP growth in Q2 2026. If core PCE has moderated towards 2.2-2.3% by September, and NFP has shown a clear cooling trend, the September meeting becomes a live candidate for the first rate cut since December 2025. If core PCE remains above 2.5% and the labour market stays tight, another hold is the base case.

Geopolitical factors, particularly the Middle East energy price shock of 2026, will have had time to either recede or intensify by September. The Fed’s ability to look through temporary energy-driven inflation (while cutting on the basis of contained core inflation) depends on inflation expectations remaining anchored, which the FOMC monitors through breakeven inflation rates and consumer/business surveys. The FOMC Rate Decision June 2026 on June 17 and the July 28-29 meeting will both set important precedents for how September is interpreted.

Rate Decision History

Sources: Federal Reserve Board; CNBC; J.P. Morgan. “n/v” = vote not yet verified. All rates are the federal funds target range. SEP = Summary of Economic Projections meeting.

Market Impact Scenarios

• Hold with dovish dot plot – A hold at 3.50%-3.75% accompanied by a dot plot shifting to show two cuts in 2026 (implying a December cut) would be interpreted as a near-cut signal. Treasury yields would fall, equities would rally, and the dollar would soften. This is the scenario that would most encourage risk-taking ahead of Q4 2026.
• Cut (25bp) – A cut to 3.25%-3.50% would confirm the start of a new easing cycle. The market reaction would be strongly positive for equities and bonds, particularly if accompanied by a dot plot showing further cuts in 2027. The September 2026 cut would be the most anticipated easing step since the 2025 cycle began.
• Hold with hawkish dot plot – A hold accompanied by a dot plot showing zero cuts in 2026 (or even no cuts until 2027) would push yields sharply higher, pressure equities, and strengthen the dollar, indicating the Fed sees inflation as an ongoing constraint on easing.

Press Conference and Forward Guidance

The September press conference at 2:30 p.m. EDT is one of the most closely watched of the year, given the simultaneous release of the updated SEP and dot plot. Powell’s characterisation of the inflation trajectory and the committee’s confidence in inflation returning to 2% will set the tone for market expectations through year-end. Language around the “balance of risks” and the committee’s “readiness to adjust” will be parsed for any signal about October or December action.

The September 2026 SEP will also update projections through 2028, providing the most comprehensive picture of where the FOMC expects the federal funds rate to settle in the longer run. Any revision to the “longer-run neutral rate” estimate, currently around 3%, would be a significant market event in itself, as it defines the endpoint of any rate-cutting cycle.

Related Events

• FOMC Rate Decision June 2026 – The June SEP meeting is the preceding comparable SEP decision and the most recent dot plot ahead of September.
• US Employment Situation (Non-Farm Payrolls) June 2026 – Labour market data from June through August feeds into the Fed’s employment assessment at the September meeting.
• US CPI Report June 2026 – CPI and PCE data through August are the critical inflation inputs for the September rate decision.

Frequently Asked Questions

Why is the September FOMC meeting particularly important?

September is a SEP meeting, meaning it produces updated economic forecasts and a dot plot alongside the rate decision. It falls at a natural midpoint in the second half of the year, when the Fed has sufficient data on Q2 economic performance to assess whether the full-year policy trajectory needs adjustment. Historically, September meetings have been associated with significant policy pivots, including the start of both easing and tightening cycles.

When will the FOMC September 2026 decision be announced?

The FOMC will publish its policy statement at 2:00 p.m. EDT on Wednesday, September 16, 2026. The Summary of Economic Projections and dot plot will be released simultaneously. Fed Chair Powell’s press conference begins at 2:30 p.m. EDT.

What is the FOMC dot plot and why is it released at September meetings?

The dot plot is a chart showing each FOMC member’s expectation for the appropriate federal funds rate at year-end for the current year and the next two years, plus the longer run. It is released at the four SEP meetings each year (March, June, September, December). Markets use the median dot to gauge the committee’s collective rate path, though individual projections can vary widely and the plot can change significantly between meetings.