Upper limit of the federal funds target range
4 percentFederal Reserve BoardRecorded passage
3-3/4 to 4 percent
The federal funds rate · September 16, 2026
Fed raises rates a quarter point on a unanimous vote
The first increase since July 2023 was widely expected. July's 9-to-3 vote to hold became a unanimous vote to raise, and 16 of 18 policymakers saw at least one more increase this year as appropriate.
3.75–4.00 %new target range
12–0committee vote
July 2023previous increase
16 of 18policymakers who saw another 2026 increase as appropriate
Story updated 2026-09-19.
The proof layer holds the September statement, implementation note, projections and preliminary press-conference transcript; the July statement and minutes; the official rate history; the policy framework and Jackson Hole speech; economic releases; and the coverage checked against them. The CBO page was recovered from a September 16 Internet Archive copy after its direct fetch returned 403. The Wall Street Journal live card is preserved through its Dow Jones Newswires syndication. The Associated Press reconstruction is preserved as registry-extracted text and markdown because its run retained no raw-body receipt.
The decision
What happened
The Federal Open Market Committee raised its target range by one-quarter percentage point to 3.75–4.00 percent on September 16, effective September 17. It was the first increase since July 27, 2023.129
- 1September 16 FOMC statement
raise the target range for the federal funds rate by 1/4 percentage point
- 2September 16 implementation note
effective September 17, 2026
- 9Open-market operations history
September 17 | 25 | 0 | 3.75-4.00
July 27 | 25 | 0 | 5.25-5.50
A quarter-point increase carried 94 percent odds the day before on CME Group's FedWatch gauge. In July, nine of 12 voters had left the target range at 3.50–3.75 percent while three wanted an increase. In September, all 12 voted to raise it.2161
- A quarter-point increase carried 94 percent odds the day before on CME Group's FedWatch gauge. In July, nine of 12 voters had left the target range at 3.50–3.75 percent while three wanted an increase. In September, all 12 voted to raise it.2161
- 21ABC News release-morning preview
odds of a quarter-point rate hike stood at 94% as of Tuesday afternoon, according to the CME Group
- 6July 29 FOMC statement
maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent
approved the following statement for release by a 9 – 3 vote
- 1September 16 FOMC statement
approved the following statement for release by a 12 – 0 vote
Computed from 6,487 daily DFEDTARU observations saved September 19.
The officials who waited in July got seven more weeks of evidence that the economy was holding up while inflation stayed well above the 2 percent goal. August added 162,000 jobs, retail sales rose 1.2 percent, and the Consumer Price Index was 3.4 percent above a year earlier, with gasoline supplying more than one-third of that month's rise in consumer prices.10332016
- The officials who waited in July got seven more weeks of evidence that the economy was holding up while inflation stayed well above the 2 percent goal. August added 162,000 jobs, retail sales rose 1.2 percent, and the Consumer Price Index was 3.4 percent above a year earlier, with gasoline supplying more than one-third of that month's rise in consumer prices.10332016
- 10July 28–29 FOMC minutes
most participants supported maintaining the current target range
- 33Reuters on the August jobs report
Nonfarm payrolls surged by 162,000 jobs last month
- 20August advance retail sales
up 1.2 percent
- 16August Consumer Price Index
The all items index rose 3.4 percent for the 12 months ending August
gasoline rose 3.9 percent in August, accounting for over one third
Federal Reserve Chair Kevin Warsh had set a public test in late August: inflation had to move toward the Fed's goal “clearly and at sufficient speed.” After the September meeting he said the economy had strengthened and inflation trends were still failing that test.115
- Federal Reserve Chair Kevin Warsh had set a public test in late August: inflation had to move toward the Fed's goal “clearly and at sufficient speed.” After the September meeting he said the economy had strengthened and inflation trends were still failing that test.115
- 11Warsh's Jackson Hole remarks
clearly and at sufficient speed
- 5Chair Warsh press conference transcript
the economy has strengthened
inflation summer trends weren't passing the test
In July, the committee had attributed part of the inflation problem to supply shocks in sectors including energy. In September it dropped that explanation and said tighter policy would support a “timelier return” to 2 percent. The war in Iran had reduced oil and gas shipments through the Strait of Hormuz, and officials were no longer counting on that shock being temporary, the Associated Press reported.611928
- In July, the committee had attributed part of the inflation problem to supply shocks in sectors including energy. In September it dropped that explanation and said tighter policy would support a “timelier return” to 2 percent. The war in Iran had reduced oil and gas shipments through the Strait of Hormuz, and officials were no longer counting on that shock being temporary, the Associated Press reported.611928
- 6July 29 FOMC statement
in part reflecting supply shocks that have driven price increases in certain sectors, including energy
- 1September 16 FOMC statement
Today's policy action will support a timelier return
- 19CBO analysis of the Iran conflict
reduction in shipments of oil and natural gas through the Strait of Hormuz
- 28Associated Press next-day reconstruction
Fed officials are no longer counting on it being a temporary shock
the July and September statements, line by line
| Line | July 29 | September 16 |
|---|---|---|
| Vote | The Federal Open Market Committee approved the following statement for release by a 9 – 3 vote: | The Federal Open Market Committee approved the following statement for release by a 12 – 0 vote: |
| Rate decision | The Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent, in support of the Federal Reserve's dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system. | The Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, in support of the Federal Reserve's dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system. |
| Economy | Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East. Productivity growth and capital investment are strong. Job gains have kept pace with the workforce, and the unemployment rate has changed little. | 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 | Inflation remains elevated relative to the Committee's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy. The Committee will deliver price stability. | Inflation remains elevated. Today's policy action will support a timelier return to the Committee's 2 percent goal. The Committee will deliver price stability. |
Each cell is the sentence group from the saved statement text that opens with the words in the first column.
A higher overnight rate makes borrowing more expensive and slows consumer and business spending. That reduces demand across the economy.25
- A higher overnight rate makes borrowing more expensive and slows consumer and business spending. That reduces demand across the economy.25
- 25Associated Press consumer-effects report
slow consumer and business spending by raising the cost of borrowing
That tool leaves the price of oil and gasoline untouched. Warsh's concern was the next step: the shock spreading from oil and gasoline into other prices and inflation expectations.5
- 5Chair Warsh press conference transcript
We cannot affect any individual price
relative prices don't broaden out
inflation expectations remain well-anchored
Disrupted refining and Red Sea shipping added to energy and transport costs. The Congressional Budget Office estimated that energy added 2.3 percentage points to the annualized second-quarter inflation rate in the measure the Fed's 2 percent goal is set in, the PCE price index.1911
- Disrupted refining and Red Sea shipping added to energy and transport costs. The Congressional Budget Office estimated that energy added 2.3 percentage points to the annualized second-quarter inflation rate in the measure the Fed's 2 percent goal is set in, the PCE price index.1911
- 19CBO analysis of the Iran conflict
conflict has disrupted global refining activities
added 2.3 percentage points to the annualized rate of inflation
- 11Warsh's Jackson Hole remarks
The Fed's preferred measure of inflation, the 12-month change in the PCE price index
Interest-rate changes reach spending, jobs and prices with a delay. The energy shock could fade before tighter credit has fully slowed the economy.828
- Interest-rate changes reach spending, jobs and prices with a delay. The energy shock could fade before tighter credit has fully slowed the economy.828
- 8Longer-run goals and policy strategy
Monetary policy actions tend to influence economic activity, employment, and prices with a lag
- 28Associated Press next-day reconstruction
By the time higher borrowing costs started to slow the economy, the gas price shock could be over
Borrowers and savers
Who feels it
Credit-card rates can respond quickly because most cards carry variable rates tied to banks' prime rate. Auto loans and adjustable-rate mortgages can also become more expensive, while savings accounts and certificates of deposit may pay more.25
- 25Associated Press consumer-effects report
Fed's policy changes flow through to credit card rates rapidly
interest rates on savings accounts and certificates of deposit are headed higher
Fixed mortgage rates tend to follow the 10-year Treasury yield more than the Fed's overnight rate.25
- Fixed mortgage rates tend to follow the 10-year Treasury yield more than the Fed's overnight rate.25
- 25Associated Press consumer-effects report
Mortgage rates don't necessarily follow what the Fed does
Consumer-finance analyst Matt Schulz expected one quarter-point increase to have a small effect. He said several increases would matter more as they stacked up over time.25
- Consumer-finance analyst Matt Schulz expected one quarter-point increase to have a small effect. He said several increases would matter more as they stacked up over time.25
- 25Associated Press consumer-effects report
single quarter-point rate increase isn't really going to have a huge impact
stack a few these on top of each other over time
Warsh said people without financial assets, home equity or retirement-plan equity live on paychecks that arrive every few weeks. With inflation at the Fed's 2 percent objective, he said, their wages could “deliver real take home pay increases.”5
- Warsh said people without financial assets, home equity or retirement-plan equity live on paychecks that arrive every few weeks. With inflation at the Fed's 2 percent objective, he said, their wages could “deliver real take home pay increases.”5
- 5Chair Warsh press conference transcript
people that don't own financial assets
they're living off their paycheck that comes every couple of weeks
deliver real take home pay increases
The signal beyond the vote
The projections
Eighteen policymakers submitted projections with the decision, a wider group than the 12 who vote. Sixteen of the 18 saw at least one more quarter-point increase by the end of 2026 as appropriate: 12 marked one more, 4 marked two, and 2 marked none. The median of their year-end judgments rose from 3.8 percent in June to 4.1 percent in September. The 2027 median was also 4.1 percent.414244
- Eighteen policymakers submitted projections with the decision, a wider group than the 12 who vote. Sixteen of the 18 saw at least one more quarter-point increase by the end of 2026 as appropriate: 12 marked one more, 4 marked two, and 2 marked none. The median of their year-end judgments rose from 3.8 percent in June to 4.1 percent in September. The 2027 median was also 4.1 percent.414244
- 4Summary of Economic Projections
Eighteen participants submitted
under their individual assumptions of projected appropriate monetary policy
Federal funds rate 4.1 4.1
June projection 3.8 3.6
- 1September 16 FOMC statement
12 – 0 vote
- 24The Hill decision report
Twelve of 18 FOMC officials projected a single rate hike
Four officials projected two hikes
Warsh submitted no projection and declined to guide the next decision.5
- Warsh submitted no projection and declined to guide the next decision.5
- 5Chair Warsh press conference transcript
I have not offered a projection of
My business is to not give forward guidance
The PCE price index was 3.7 percent above a year earlier in July. Policymakers projected a 3.7 percent rise in PCE prices from the end of 2025 to the end of 2026, up from their 3.6 percent June projection, and 2.3 percent for 2027. Their median projection for PCE inflation reaches 2 percent in 2029.184
- The PCE price index was 3.7 percent above a year earlier in July. Policymakers projected a 3.7 percent rise in PCE prices from the end of 2025 to the end of 2026, up from their 3.6 percent June projection, and 2.3 percent for 2027. Their median projection for PCE inflation reaches 2 percent in 2029.184
- 18July personal income and outlays
PCE price index for July increased 3.7 percent
- 4Summary of Economic Projections
PCE inflation 3.7 2.3 2.1 2.0
June projection 3.6 2.3 2.0
percent changes from the fourth quarter of the previous year to the fourth quarter of the year indicated
September 16 to 18
What happened next
About two hours after the announcement, President Donald Trump demanded rates of 1 percent or less and called for the Fed to lower them fast.26
- 26The Hill on Trump's reaction
Interest Rates in the United States should be 1%, or less
Trump’s reaction came about two hours
Trump portrayed Warsh as unable to change the result, saying he had told the chair to cast the same vote as the rest of the board. He called it “a very tough board” and “very hostile.”29
- Trump portrayed Warsh as unable to change the result, saying he had told the chair to cast the same vote as the rest of the board. He called it “a very tough board” and “very hostile.”29
- 29DealBook on Trump's reaction
I talked to Kevin, and I said, ‘You might as well vote with the board because it’s not going to matter.’
a very tough board
Warsh declined to discuss conversations with Trump. He described central-bank independence as “a two-way street” and said trade and fiscal policymakers should stay in their lane.5
- Warsh declined to discuss conversations with Trump. He described central-bank independence as “a two-way street” and said trade and fiscal policymakers should stay in their lane.5
- 5Chair Warsh press conference transcript
I don't have anything for you on discussions with the president
Independence is a two-way street
trade policy and fiscal policy stay in their lane too
Before the meeting, Treasury Secretary Scott Bessent had argued that a supply shock is not usually met with higher rates unless it starts spreading through the rest of the economy.32
- Before the meeting, Treasury Secretary Scott Bessent had argued that a supply shock is not usually met with higher rates unless it starts spreading through the rest of the economy.32
- 32Dow Jones Newswires on Bessent's supply-shock argument
traditionally you don't raise [rates]...unless you see second or third-order effects
The 10-year Treasury yield slipped the next day, a move the Associated Press tied to easing inflation worries. That yield strongly influences mortgage rates, while the Fed controls a short-term rate.28
- 28Associated Press next-day reconstruction
10-year Treasury yield even slipped a bit, a likely sign of reduced inflation worries
The 10-year Treasury, for instance, strongly influences mortgage rates
By September 18, futures markets put the odds of another increase in October at about 58 percent, up from 42 percent a week earlier. Goldman Sachs expected an October increase, while Bank of America expected increases in October and December. Natixis strategist Jack Janasiewicz said, “We remain unconvinced that this is the start of an aggressive new tightening cycle.”27
- By September 18, futures markets put the odds of another increase in October at about 58 percent, up from 42 percent a week earlier. Goldman Sachs expected an October increase, while Bank of America expected increases in October and December. Natixis strategist Jack Janasiewicz said, “We remain unconvinced that this is the start of an aggressive new tightening cycle.”27
- 27CNBC follow-up on Warsh's framing
near 58% Friday morning, according to the CME Group's FedWatch gauge
A week ago, the probability was 42%
Jack Janasiewicz, portfolio manager and lead portfolio strategist
We remain unconvinced that this is the start of an aggressive new tightening cycle
| When | Record |
|---|---|
| July 29 | The committee holds at 3.50–3.75 percent in a 9–3 vote; three members prefer a quarter-point increase. |
| September 16, 2 p.m. | The committee raises the range to 3.75–4 percent in a 12–0 vote and releases new projections. |
| September 16, 2:30 p.m. | Chair Kevin Warsh holds a press conference and says the committee is not providing forward guidance. |
| September 17 | The new target range takes effect. |
Open questions
What we do not know yet
- Whether another increase follows this one. The year-end views are individual judgments, and Warsh declined to prejudge the next decision.45
- 4Summary of Economic Projections
individual assessments of appropriate monetary policy
- 5Chair Warsh press conference transcript
ill-prepared to pre-judge those future actions
- 4Summary of Economic Projections
- How long the Iran-war energy shock lasts.28
- 28Associated Press next-day reconstruction
the gas price shock could be over
- 28Associated Press next-day reconstruction
- What the next inflation and growth reports show. August inflation in the Fed's preferred measure and the annual national-account updates, including GDP revisions, are due September 30.18
- 18July personal income and outlays
Next release: September 30, 2026
annual updates of national, industry, and regional data
- 18July personal income and outlays
- What the September deliberations add. The minutes are due October 7, three weeks after the decision.7
- 7FOMC meeting calendar
The minutes of regularly scheduled meetings are released three weeks after the date of the policy decision.
- 7FOMC meeting calendar
Sources
The records
Everything this page rests on, numbered where the story cites it. We keep a dated copy of each one.
Primary documents
- 1September 16 FOMC statement · Federal Reserve Board, 2026-09-16 · the target range, vote and statement comparison
- 2September 16 implementation note · Federal Reserve Board, 2026-09-16 · the effective date and operating rates
- 3September projections release · Federal Reserve Board, 2026-09-16 · the release record for the projections
- 4Summary of Economic Projections · Federal Reserve Board, 2026-09-16 · Table 1 medians and participant distributions
- 5Chair Warsh press conference transcript · Federal Reserve Board, 2026-09-16 · Warsh's description of the decision and projections
- 6July 29 FOMC statement · Federal Reserve Board, 2026-07-29 · the previous statement in the redline
- 7FOMC meeting calendar · Federal Reserve Board, captured 2026-09-19 · the meeting record and unavailable minutes
- 8Longer-run goals and policy strategy · Federal Reserve Board, 2025-08-22 · the mandate and policy-tool framework
- 9Open-market operations history · Federal Reserve Board, 2026-09-16 · the September increase and the previous increase in July 2023
- 10July 28–29 FOMC minutes · Federal Reserve Board, released 2026-08-19 · the prior preference to wait and the case for an increase
- 11Warsh's Jackson Hole remarks · Federal Reserve Board, 2026-08-28 · the inflation standard stated before the meeting
Official data
- 12DFEDTARU daily series · Federal Reserve Bank of St. Louis, through 2026-09-19 · the target-range path and derived figures
- 13DFEDTAR discontinued daily series · Federal Reserve Bank of St. Louis, through 2008-12-15 · the earlier target history
- 14DFEDTARU series notes · Federal Reserve Bank of St. Louis, captured 2026-09-19 · the upper-limit definition and vintage
- 15DFEDTAR series notes · Federal Reserve Bank of St. Louis, captured 2026-09-19 · the single-target and range boundary
- 16August Consumer Price Index · U.S. Bureau of Labor Statistics, 2026-09-11 · the gasoline contribution and core-inflation baseline
- 17Second-quarter GDP, second estimate · U.S. Bureau of Economic Analysis, 2026-08-26 · headline growth and private domestic demand
- 18July personal income and outlays · U.S. Bureau of Economic Analysis, 2026-08-26 · the September 30 PCE and annual-update schedule
- 19CBO analysis of the Iran conflict · Congressional Budget Office, 2026-09-15 · the energy-shock transmission path and PCE effects
- 20August advance retail sales · U.S. Census Bureau, 2026-09-16 · the retail-sales rise between the two meetings
Coverage checked
- 21ABC News release-morning preview · ABC News, 2026-09-16 · the expected quarter-point move checked against the result
- 22CBS News decision report · CBS News, 2026-09-16 · the result and projection framing checked against the records
- 23Guardian decision report · The Guardian, 2026-09-16 · the result, projection path and political reaction
- 24The Hill decision report · The Hill, 2026-09-16 · the result and projection-dot counts
- 25Associated Press consumer-effects report · PBS NewsHour, 2026-09-16 · the decision's reported effects on borrowers and savers
- 26The Hill on Trump's reaction · The Hill, 2026-09-16 · the immediate political response
- 27CNBC follow-up on Warsh's framing · CNBC, 2026-09-18 · the post-decision interpretation of Warsh's words
- 28Associated Press next-day reconstruction · Associated Press, 2026-09-17 · the lag risk and next-day Treasury-yield movement
- 29DealBook on Trump's reaction · The New York Times, 2026-09-17 · the reported Trump-Warsh conversation and description of the board
- 30Reuters Breakingviews on the renewed Fed dispute · Reuters Breakingviews, 2026-09-16 · Treasury's campaign on long yields and the independence dispute
- 31Reuters decision report · Reuters, 2026-09-16 · same-day policy, projection and market context
- 32Dow Jones Newswires on Bessent's supply-shock argument · Wall Street Journal live coverage, 2026-08-31 · the pre-meeting argument against raising rates for a supply shock
- 33Reuters on the August jobs report · Reuters, 2026-09-04 · the 162,000 August payroll gain
Figures in the source documents 5
Market-implied odds of a quarter-point increase on September 15
94 percentABC NewsRecorded passage
odds of a quarter-point rate hike stood at 94%
Policymakers expecting at least one more quarter-point increase by year-end
16 of 18 policymakersReutersRecorded passage
16 of 18 policymakers anticipate at least one more quarter-percentage-point hike
Median projected federal funds rate at the end of 2026
4.1 percentFederal Reserve BoardRecorded passage
Federal funds rate 4.1
Median projected PCE inflation for 2026
3.7 percentFederal Reserve BoardRecorded passage
PCE inflation 3.7
Since the previous story
Upper limit of the federal funds target range: first tracked in this story. 3-3/4 to 4 percent
Market-implied odds of a quarter-point increase on September 15: first tracked in this story. odds of a quarter-point rate hike stood at 94%
Policymakers expecting at least one more quarter-point increase by year-end: first tracked in this story. 16 of 18 policymakers anticipate at least one more quarter-percentage-point hike
Median projected federal funds rate at the end of 2026: first tracked in this story. Federal funds rate 4.1
Median projected PCE inflation for 2026: first tracked in this story. PCE inflation 3.7
Sources
- The Wall Street Journal · October 1, 2026 · Another Fed Official Suggests Next Rate Increase Can Wait
- Federal Reserve Board · September 16, 2026 · Summary of Economic Projections, September 16, 2026
- Federal Reserve Board · September 16, 2026 · Federal Reserve issues FOMC statement
- Reuters · September 16, 2026 · Fed hikes rates in search of 'timelier' drop in inflation, sees more tightening ahead
- ABC News · September 16, 2026 · Federal Reserve expected to raise interest rates for the first time since 2023