The Fed did what the market had priced at 88.5%, and did it more decisively than almost anyone expected: a 25bps hike to 3.75%–4.00%, the first hike since 2023, passed by a unanimous 12–0 vote. Just seven weeks ago, the same committee held rates by a divided 9–3 vote, with three members already pushing for exactly this move. By today, the rest of the committee had caught up entirely — there was no one left to dissent.

The new dot plot released alongside the decision was just as important as the hike itself, and it was hawkish on nearly every measure. Put together, the SOG Capital DXY Bias Score jumped to +8 — the highest reading of this entire tracking cycle.

→ Current DXY Bias: Bullish DXY (+8)

What the Fed actually did, in plain terms

A "25 basis point hike" means the Fed raised its target interest rate by a quarter of one percent. Interest rates are the price of borrowing money — when the Fed raises them, borrowing gets more expensive across the economy, which is generally how the Fed tries to cool down inflation. A hike is also generally seen as supportive of a currency's value, because higher interest rates tend to attract more foreign investment into dollar-denominated assets.

The vote itself tells its own story. In July, three of the Fed's twelve voting members already wanted to hike, while the majority preferred to wait. By September, every single vote was in favor. That's not a committee grudgingly going along with a decision — that's a committee that has fully converged, and it happened over just two months of increasingly hot economic data.

Every driver behind the +8, after today's decision

Driver Reading Score
Fed Policy Stance Hike +25bps to 3.75–4.00%, unanimous 12–0 +1
SEP Dot Plot 2026 median dot rises to 4.1% from 3.8% +1
Jobs (NFP) +162K vs 53K forecast — triple the estimate +1
Wages (AHE) +0.3% MoM — matched consensus exactly 0
CPI 3.4% YoY — flat vs July, core cooled to 2.4% 0
U-6 Unemployment 7.7% — improved from 7.9% prior +1
PPI 5.4% YoY — up sharply from 4.7% +1
COT Positioning Net longs 17,604, +579 vs prior week +1
CME FedWatch 88.5% hike odds heading in — resolved as priced +1
Geopolitical Risk Iran/Hormuz re-escalation — hawkish for energy +1
TOTAL Bullish DXY +8

Eight of ten drivers are now scoring +1, with only wages and CPI sitting neutral — and nothing scoring negative anywhere on the board. This is the cleanest bullish-dollar picture this cascade has produced.

What flipped today, and why it matters more than the hike itself

The hike itself was fully priced in — CME FedWatch had it at 88.5% heading into the decision, so in one sense there was no surprise. What actually moved the score today was two things flipping from neutral to bullish at once.

Flipped To Bullish
Fed Policy — from Hold (0) to Hike (+1)
A hold scores neutral in this model regardless of tone; only an actual vote to hike or cut moves this driver. July's hold, even with three hawkish dissents, scored a flat 0. Today's unanimous hike is the first time this driver has scored positive all cycle.
Flipped To Bullish
SEP Dot Plot — 2026 median rate projection rises to 4.1%
The Fed's own committee members submit anonymous projections of where they think rates should be by year-end — collectively known as the "dot plot." The median projection for 2026 rose to 4.1%, up from 3.8% in June, and sits above the midpoint of the 3.75–4.00% range adopted today. In plain terms: the committee's own median view is that at least one more hike is coming before the year is out — this wasn't the last move, just the first of possibly two.

The inflation forecast that should give hikers pause

Here's the part of the SEP that doesn't fit a clean "hawkish and done" story. Even as the Fed actively raises rates, its own inflation forecasts for 2026 moved higher, not lower.

Worth Watching
2026 inflation forecasts revised up, not down
Median 2026 PCE inflation (the Fed's preferred inflation gauge) rose to 3.7%, up from 3.6% in June. Core PCE, which strips out food and energy, rose to 3.4% from 3.3%. That means the committee is hiking rates specifically because it doesn't expect inflation to cool as fast as previously thought — not because inflation is already coming under control. The one offsetting number: the 2026 unemployment forecast improved to 4.1% from 4.3%, which is what gave the committee room to keep tightening without an employment-side objection.

What changed in the statement's language

Beyond the numbers, a few wording changes are worth flagging for anyone who reads these statements closely. July's statement explicitly named "the conflict in the Middle East" as a source of uncertainty — a first for this cycle. Today's statement pulled back to the more general phrase "geopolitical developments," dropping the specific reference. One closing line, however, was kept word-for-word for a third straight meeting: "The Committee will deliver price stability." That's the Fed's own hawkish anchor phrase, and its persistence across a hold, a divided vote, and now a unanimous hike suggests it isn't going anywhere soon.

The Bottom Line

This is about as clean a bullish-dollar signal as a single day can produce: a hike that was fully priced, delivered unanimously by a committee that was split just seven weeks ago, backed by a dot plot that points to more tightening ahead, and landing on top of an already-hot run of NFP, PPI, and COT data. The one genuine counterpoint — inflation forecasts moving the wrong way even as the Fed tightens — is worth keeping in view, but it didn't stop today's vote, and the market had already priced the outcome days in advance. With the September cycle now fully closed out, the next scheduled catalysts are October's jobs report and the October 27–28 FOMC meeting, which carries no new SEP.

The live DXY Bias Score behind this call — every driver, updated the moment new data lands — is at the SOG Capital Macro Tracker.