The U.S. Federal Reserve raised its benchmark federal funds rate by 25 basis points, bringing the target range to 3.75%–4.00%, in a policy decision announced on September 16, 2026. The Federal Open Market Committee said the move was intended to support its dual mandate while inflation remained elevated. The Fed noted that economic activity was expanding at a solid pace, domestic spending remained resilient, productivity growth was strong and capital investment was robust, while job gains had kept pace with the workforce and unemployment had changed little. The decision marks a shift upward after the federal funds target had been maintained at 3.50%–3.75% earlier in 2026. Higher benchmark rates can feed through to borrowing costs for households and businesses, including some consumer loans and other forms of credit, although the actual rate faced by borrowers depends on the type of loan, lender and individual financial circumstances. The Fed said the latest policy action was aimed at supporting a more timely return of inflation toward its 2% goal, while policymakers continue to monitor economic and financial developments.
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