Fed raises interest rates by 0.25 percentage point

The Federal Reserve raised its benchmark interest rate by 0.25 percentage point (25 basis points) on Wednesday, 16 September 2026. The 12-0 unanimous vote marked the central bank's first rate increase in three years.

Updated macroeconomic projections showed upward revisions for gross domestic product and inflation forecasts, alongside lower unemployment projections. The Fed's dot plot indicated that 12 policymakers project one additional 25-basis-point increase before the end of the year, followed by an extended hold. For the end of 2027, eight officials project rates consistent with one further increase and subsequent pause.

In the bond market, the 10-year Treasury note yield rose back above 5% ahead of the decision, reaching its highest level since 2007. The unanimous decision surprised market observers who had anticipated one or two dissenting votes, including from governor Christopher Waller.

Federal Reserve Chair Kevin Warsh stated that inflation has been too high for too long and noted that broad financial conditions could hardly be described as restrictive. The central bank will release the minutes of the meeting on 7 October, and the next FOMC meeting is scheduled for 27-28 October 2026.