Fed Raises Rates for First Time Since 2023 as Persistent Inflation Drives Tighter Policy
The Federal Reserve raised its target range by 25 basis points to 3.75%-4.00% on Sept. 16, 2026, its first hike since 2023 and first under Chair Kevin Warsh.
UNITED STATES,ECONOMY
Global N Press
9/16/20261 min read
On September 16, 2026, the U.S. Federal Reserve raised its federal funds target range by 25 basis points to 3.75%-4.00%, marking its first rate increase since 2023 and the first policy move under new Chair Kevin Warsh. The Federal Open Market Committee said inflation remained elevated and that the increase would support a more timely return to its 2% long-term target. The Fed’s updated projections showed that 16 of 18 policymakers expected at least one additional quarter-point rate increase by the end of 2026, although individual forecasts do not represent a commitment to future policy. The central bank also raised its forecast for inflation, measured by the Personal Consumption Expenditures price index, to 3.7% for 2026 from 3.6% previously, and projected that inflation would not return to the 2% target until 2029.
Policymakers cited broad price pressures linked to tariffs, higher energy costs and strong capital investment and demand associated with the artificial intelligence boom. The decision came despite President Donald Trump’s repeated calls for lower interest rates. The higher-rate environment is expected to affect borrowing costs across the U.S. economy, including mortgages, corporate financing and consumer credit, while the Fed’s future decisions will depend on incoming inflation, employment and economic data.
