Most Federal Reserve officials expect to raise interest rates again before the end of the year, according to minutes of the central bank’s September meeting released October 7. “Most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end,” the minutes say.
At that meeting, on September 16, the Federal Open Market Committee voted 12 to 0 to raise its benchmark rate by a quarter point, to a range of 3.75 to 4 percent. The committee next meets October 27 and 28.
The minutes describe a Fed worried about prices. Fed staff estimated that inflation, measured by the price index for personal consumption expenditures, rose to 3.8 percent in the 12 months through August, against the committee’s 2 percent goal. Officials “generally assessed inflation risk as skewed to the upside,” and some said those risks had grown in recent months. Staff attributed most of the rise to past tariff increases, higher energy and input costs tied to geopolitical events, and prices of technology goods linked to the buildout of artificial intelligence. Several officials said they did not see the current rate as restrictive, or saw it as only mildly so.
The officials also left themselves room. They “approached each meeting with an open mind,” the minutes say, and decisions will depend on incoming data.
What Texas borrows
Texas cities, counties, school districts, water districts and other local governments owed $368.30 billion at the end of fiscal 2025, according to the Texas Bond Review Board, up $103.77 billion, or 39.2 percent, in five years. About 70 percent of it, $256.64 billion, is general obligation debt repaid from local property taxes.
More is coming. In fiscal 2025, 229 local governments held 527 bond elections that approved up to $63.71 billion in new debt, the board reported. Higher rates have already changed how that debt is managed. Refinancings fell 40.9 percent from their 2021 high, which the board attributed primarily to the rising interest rate environment.
Texans approved those bonds at their own ballot boxes. None of them voted for the 12 officials who decide the next rate move on October 28.
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