Overview
- The Federal Reserve raised its policy rate by 0.25 percentage point to a target range of 3.75–4.00 percent in a unanimous FOMC vote on Wednesday, September 16, 2026.
- The Fed said the decision responds to persistent inflation, citing continued monthly gains in core consumer prices and a recent jump in energy costs driven by tensions in the Middle East.
- FOMC projections released with the decision show a year-end policy rate near 4.1 percent and foresee one additional rate hike this year.
- Higher policy rates will push up borrowing costs such as mortgage rates and could slow U.S. growth, and the move is expected to draw criticism from President Trump ahead of November’s midterm elections.
- The Fed’s shift follows recent tightening by the European Central Bank and expectations that the Bank of Japan will also raise rates, signaling synchronized policy moves among major central banks to fight inflation.