The Federal Reserve on Wednesday raised its benchmark interest rate for the first time in over three years, citing concerns over stubborn inflation driven in part by higher energy prices.
This story about the September 2026 FOMC meeting will be updated with further details.
Fed policymakers voted 12-0 to raise the federal funds rate from a range of 3.5% to 3.75% to a new target of 3.75% to 4%. The 25-basis-point increase marks the first rate hike since July 2023 and follows five consecutive meetings in which the Fed held rates steady.
The Federal Open Market Committee (FOMC), the central bank’s panel responsible for monetary policy decisions, noted that “Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust.”
“Job gains have kept pace with the workforce, and the unemployment rate has changed little. Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2% goal,” the FOMC added.
Federal Reserve Chair Kevin Warsh will discuss the interest rate hike at a press conference. (Eric Lee/Reuters)
The rate hike announcement was accompanied by a summary of economic projections prepared by policymakers. The median member of the panel projected one additional 25-basis-point rate hike this year on the so-called “dot plot,” as the FOMC is set to convene again in October and December, where further moves could be considered.
Fed Chair Kevin Warsh is scheduled to hold a press conference at 2:30 p.m. ET.
