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Fed & Monetary Policy

Fed raises rates a quarter point as Warsh breaks with Trump

The Federal Reserve lifted its target range to between 3.75% and 4% in a unanimous vote, its first increase in three years.

Assembled by Claude from 12 sources at 12 outlets · Friday, September 18, 2026, Morning edition, 10:23 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 target interest rate by a quarter percentage point, to a range of 3.75% to 4% axios.com. It was the first increase in three years bbc.co.uk. The vote was unanimous bbc.co.uknewsquawk.com. Chairman Kevin Warsh said the central bank raised rates by 25 basis points because inflation trends had "not meaningfully" improved wsj.com. At the press conference that followed the decision, Warsh said inflation "is too high and has been for too long" theguardian.com.

Bloomberg reported that the Fed paired the increase with a signal of an additional hike later this year, steps aimed at containing inflation bloomberg.com. Newsquawk recorded the move as in line with what markets had expected newsquawk.com. Admiral Markets said faster balance-sheet reduction could tighten financial conditions alongside the rate increases and may affect longer-dated bonds, although the scale of that reduction was not set out admiralmarkets.com.

What the projections show

Projections released with the decision showed 12 of 18 officials expecting one more rate rise this year, while four expect two more axios.com. The Fed raised its projection for GDP growth by year end to 2.3 per cent, up 0.1 percentage points newagebd.net. The 2026 growth projection was lifted to 2.3 per cent from the 2.2 per cent pencilled in during June, and the unemployment rate projection was lowered to 4.1 per cent rttnews.com.

Warsh reiterated his belief in the central bank's inflation objective in remarks after the meeting newagebd.net. The Financial Times described the outcome as the chair defying President Donald Trump's calls for lower borrowing costs ft.com.

The political reaction

Trump responded to the decision by saying rates should be lowered "AND FAST!" axios.com. Writing on Truth Social, he said interest rates "should be 1%, or less, because we are the Best Credit in the World" axios.com. He also said he had confidence in the Federal Reserve chair he appointed ft.com. The BBC noted that rates were raised despite fierce opposition from the president, who had called for a cut bbc.co.uk.

Peter Navarro, the White House senior counselor on trade and manufacturing, called the unanimous vote to increase rates a "monumental mistake" c-span.org. Navarro separately said the Fed had made an "inexplicable" error in raising rates during an energy price surge washingtontimes.com. Bloomberg said the steps taken would test Warsh's relationship with Trump bloomberg.com.

Three markers follow from the week. The first is whether the additional increase the Fed has flagged for this year arrives bloomberg.com. The second is the pace of balance-sheet reduction, which Admiral Markets flagged as a separate tightening channel affecting longer-dated bonds admiralmarkets.com. The third is whether White House pressure moves beyond public statements, after two senior advisers attacked the decision on the record washingtontimes.comc-span.org.

Sources

  1. wsj.com: Fed Raises Interest Rates for First Time in Three Years - WSJ (2026-09-18)
  2. theguardian.com: 'Inflation is too high and has been for too long,' says Kevin Warsh as Fed announces rate hikes (2026-09-17)
  3. bloomberg.com: Fed Raises Rates to Curb Inflation, Drawing Rebuke From Trump - Bloomberg (2026-09-17)
  4. bbc.co.uk: US interest rates raised for first time in three years (2026-09-17)
  5. admiralmarkets.com: Fed Raised Interest Rates to 3.75%-4.00%: What It Means for Markets (2026-09-18)
  6. axios.com: Trump demands lower interest rates after Fed decision (2026-09-16)
  7. newagebd.net: US Fed raises rates to tackle 'too high' inflation, irking Trump - New Age (2026-09-17)
  8. rttnews.com: Cryptos Gain After Fed Rate Hike - RTT News (2026-09-17)
  9. newsquawk.com: Australia sells AUD 1.0bln 1.00% November 2031 bonds, b/c 4.47, average yield 4.9936% (2026-09-18)
  10. ft.com: Kevin Warsh defies Donald Trump's calls for lower borrowing costs - Financial Times (2026-09-18)
  11. washingtontimes.com: Peter Navarro : Fed made 'inexplicable' error in raising rates during energy price surge (2026-09-17)
  12. c-span.org: White House Trade Adviser Navarro Calls Rate Fed Rate Hike a "Monumental Mistake" (2026-09-17)