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Fed & Monetary Policy

Fed raises rates for the first time since 2023, and says it is not done

A unanimous quarter-point increase takes the target range to 3.75 to 4 per cent, with most officials projecting another rise before year-end.

Assembled by Claude from 11 sources at 11 outlets · Thursday, September 17, 2026, Morning edition, 10:14 AM EDT · no human byline

Disclosure. This item was assembled by an AI from the RSS excerpts of the outlets tagged inline. No human wrote or checked it before publication. Feed selection and categories are editorial choices by Teresa Lo. Nothing here is investment advice.

What happened

The Federal Reserve raised its benchmark interest rate by a quarter point on Wednesday, the first increase since 2023 fortune.cominvestopedia.com. The new target range is 3.75 to 4 per cent bbntimes.com. The vote was unanimous and came in the face of open opposition from President Donald Trump, who had called for a cut bbc.co.uk. All 12 voters on the Federal Open Market Committee backed the move cnbc.com.

Chair Kevin Warsh gave the reason in a single sentence. "The plain fact is that inflation is too high and has been for too long," he said nbcnews.com. He used the press conference to warn about continued inflation, and the main US equity indexes closed lower on the day investopedia.com.

Why it matters to investors

The committee did not present the move as a one-off. Most officials penciled in one more increase before the end of this year wsj.com. One count of the new projections found 16 of 18 officials judge the tightening unfinished goldsilver.com, and the median official now expects the federal funds rate to end higher, with no cuts pencilled in through 2027 fortune.com.

The Fed is tightening into an economy it describes as strengthening rather than slowing. In the September projections it raised its 2026 real GDP growth forecast to 2.3 per cent from 2.2 per cent and lifted next year's to 2.4 per cent from 2.3 per cent chosun.com. It also cut the unemployment rate forecast to 4.1 per cent from 4.3 per cent tradingkey.com. The median growth projection now stands at 2.3 per cent for 2026 and 2.4 per cent for 2027 forexfactory.com.

The cause of the inflation matters for how long the campaign runs. The Wall Street Journal attributed the change in the outlook to an energy shock and a surge of AI investment, which together have reshaped what the committee expects prices to do wsj.com. Neither is a demand pressure the funds rate reaches quickly.

What to watch

The dissent record is the clearest guide to where the committee has travelled. At the July meeting three regional presidents, Cleveland's Beth Hammack, Minneapolis's Neel Kashkari and Dallas's Lorie Logan, dissented in favour of an immediate hike bbntimes.comgoldsilver.com. They lost that vote 9 to 3 fortune.com. Two meetings later the position they argued for is the committee's unanimous one bbc.co.ukcnbc.com.

Three things to follow. Whether the single additional increase in the projections proves a floor or a ceiling wsj.com. Whether the labour market loosens faster than the lowered 4.1 per cent unemployment forecast implies tradingkey.com. And whether Warsh keeps framing inflation as a problem of duration rather than level, which is an argument for a longer campaign rather than one move nbcnews.com.

Sources

  1. bbntimes.com: Fed Hikes Rates to 3.75%–4% as Energy Inflation Forces First Tightening Since 2023 (2026-09-16)
  2. fortune.com: The Fed just delivered a unanimous rate hike, the first in three years, and no cuts through 2027 (2026-09-16)
  3. wsj.com: The Fed voted unanimously to raise rates for the first time in three years, and most officials projected one more increase by year-end (2026-09-16)
  4. bbc.co.uk: US interest rates raised for first time in three years (2026-09-17)
  5. nbcnews.com: Fed raises interest rates for first time since 2023, defying Trump as inflation mounts (2026-09-16)
  6. investopedia.com: Stock Market Today: Indexes Close Lower Again as Fed Chair Warsh Warns About Inflation ... (2026-09-16)
  7. goldsilver.com: The Fed Just Hiked. 16 of 18 Officials Say It's Not Done. - GoldSilver (2026-09-16)
  8. cnbc.com: Here are five key takeaways from Wednesday's Fed rate hike - CNBC (2026-09-16)
  9. forexfactory.com: FOMC Summary of Economic Projections | Forex Factory (2026-09-16)
  10. chosun.com: Fed Hikes Rates 0.25% Despite Trump (2026-09-17)
  11. tradingkey.com: S&P 500 Index Forecast : Can US Stocks Still Rise After the Fed Resumes Rate Hikes? (2026-09-17)