Hawkish rate hike from the Fed 2026 09 17

Macro & FICC Research Nordic Alert 17 September 2026

Hawkish rate hike from the Fed Global key stories Hawkish rate hike from the Fed. As expected, the Fed raised interest rates for the first time in over three years last night. The 0.25 percentage point hike - supported by all twelve voting members - brought the policy rate to the range of 3.75-4.00 percent. The members' interest rate forecasts signal another hike this year and open the way for another hike in 2027, which is more hawkish than we had expected. The market reaction was also hawkish, with larger rate hikes in short-term than in long-term maturities and a stronger dollar. The interest rate forecasts and Warsh's statements at the press conference challenge our view of a single rate hike to bolster the Fed's credibility. We believe that energy prices and the risk of indirect effects on other prices will be decisive. However, an increase at the October meeting - which comes just days before the mid-term elections - seems less likely. Read more in Elisabet Kopelman's analysis here.

US stock markets fell from positive levels and closed lower after the interest rate announcement (S&P 500: -0.5 percent; Nasdaq: -0.01 percent). Earlier in the day, US retail sales data for August came in even stronger than expected. Trump made threatening statements about trade with the EU due to the Union's plans for an "alliance for the future" with Canada and he is also not happy with the hike from the Fed. At the same time, the war in the Middle East has expanded, with Saudi Arabian aircraft now attacking Yemen and Houthi rebels who are hitting Saudi Arabian cities with drones and missiles (read more about the development here). Trump is also reportedly about to discuss Iran again with the leaders of the Gulf countries. Oil prices have nevertheless fallen back slightly (USD 105.6 per barrel), which is probably due to subdued concerns about supply disruptions following reports that Saudi Arabia is getting more oil, partly through Oman and partly through the previously attacked East-West pipeline. Stock markets in Asia are mixed this morning (Japan's Nikkei +0.3 percent, China's Shanghai -0.4 percent) but futures are clearly pointing higher ahead of the stock market openings in both Europe and the US.

Today's agenda is calmer than yesterday's. The focus is on Norges Bank's regional network report, interest rate announcements from the Bank of England and unemployment figures from Sweden. As usual on Thursdays, weekly statistics from the US labour market will also be released in the afternoon.

Bank of England: Unchanged interest rate but with a hawkish tone. The Bank of England is the next central bank to issue interest rate announcements and they are expected to leave the policy rate unchanged at 3.75% but also for those with a hawkish communication. The focus is on whether higher energy prices and stronger growth have changed the view of inflation. However, the continued weak labour market speaks for caution.

Important input ahead of next week's interest rate announcement from Norges Bank. The quarterly Norwegian Regional Network Report is published today. The report will be an important basis for Norges Bank's forecasts and the interest rate path in the Monetary Policy Report and the interest rate announcement on 24 September. We expect the report to show moderate output growth and to attach particular importance to the underlying inflation drivers. The key question is whether these drivers confirm the positive inflation development during the summer.

Nordic Alert 17 September 2026 2

Nordic key stories Important input ahead of next week's interest rate announcement from Norges Bank. The quarterly Norwegian Regional Network Report is published today. The report will be an important basis for Norges Bank's forecasts and the interest rate path in the Monetary Policy Report and the rate announcement on 24 September. We expect the report to show moderate output growth and to attach particular importance to the underlying inflation drivers. The key question is whether these drivers confirm the positive inflation development during the summer.

Yesterday's Swedish data in brief: The Riksbank's…