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Fed hikes rates 25 basis points to 3.75%-4.00% in first move in three years

10/5/2026

The Federal Reserve raised the federal funds rate target range by 25 basis points to 3.75%-4.00% on Sept. 16, marking the central bank's first rate hike in three years.

The move follows a significant increase in inflation this year and reverses the monetary policy stance adopted after the rapid tightening of 2022 and 2023.

Federal Reserve Chair Kevin Warsh stated that recent inflation data does not show significant improvement, making action necessary to support a quicker return to the central bank's 2% inflation target.

The Fed's accompanying statement noted that inflation remains elevated.