Live updates: Fed rate decision September

While the Federal Reserve’s latest release was more hawkish than expected, the main risk the the central bank faces is tarnishing its anti-inflation credibility, which warrants favoring their hawkish reaction, said Alexandra Wilson-Elizondo, deputy chief investment officer of multi-asset strategies at Goldman Sachs Asset Management.

The recent rise in energy prices and resilient economic activity data likely drove the Fed’s forecasts, she said.

“We don’t see a singular upcoming bearish catalyst, although strikes, the shutdown, and the resumption of student loan repayments collectively will sting and drive bumpiness in the data between now and their next decision,” she said. “As a result, we believe that their next meeting will be live, but not a done deal.”

— Michelle Fox

A government shutdown could limit the access the Federal Reserve has to inflation data it would typically use to help make its November rate decision. However, Fed Chair Jerome Powell said the central bank will just have to contend with that scenario if it happens.

“If there is a government shutdown and it lasts through the next meeting, then it’s possible we wouldn’t be getting some of the data that we ordinarily get,” Powell said.

“We would just have to deal with that,” Powell added. “It’s hard for me to say in advance how that would affect that meeting. It would depend on all kinds of factors.”

— Sarah Min, Jesse Pound and Jeff Cox

Fed Chair Jerome Powell said restoring price stability is the top priority of the central bank and failing to do that has serious consequences for the economy.

“The worst thing we can do is to fail to restore price stability, because the record is clear on that,” Powell said. “If you don’t restore price stability, inflation comes back and … you can have…