Fed raises rates to 3.75%–4%: what the Sept. 16 decision means
The Fed raised its benchmark rate a quarter point on Sept. 16, 2026, its first increase since 2023. Most officials expect one more hike this year.
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fed funds range · Sept. 16
The Federal Reserve voted 12-0 on September 16, 2026, to raise the federal funds rate by a quarter point, to a range of 3.75% to 4%. It is the first increase since 2023.
What the Fed decided
The Federal Reserve’s rate-setting committee raised the federal funds rate by a quarter of a percentage point on September 16, 2026. The new target range is 3.75% to 4%. The vote was unanimous, 12-0, and it is the first increase since 2023.
In its statement, the committee said economic activity has been expanding at a solid pace while inflation remains elevated relative to its 2% goal.
What officials expect next
The meeting came with a new set of projections, known as the dot plot. Twelve of the 18 officials who submit forecasts expect one more quarter-point increase before the end of 2026, which would bring the range to 4% to 4.25%. Their projections for the end of 2027 sit at that same level.
That is a forecast, not a schedule. The dot plot has been wrong before, in both directions, and it changes every three months.
What it means for your money
Credit cards and variable-rate loans. These follow the Fed most directly. Expect the rate on a card balance or a home equity line to rise by about the same quarter point within one or two statements.
New mortgages and auto loans. Lenders price these off the bond market, which had largely anticipated the move. The decision matters less than the signal that another increase is likely.
Loans you already have at a fixed rate. Nothing changes.
Savings. High-yield savings accounts and CDs tend to pay more after an increase, though banks raise deposit rates more slowly than loan rates.
What to watch
The next decision comes October 28, 2026. If inflation data between now and then stays firm, the second increase most officials projected becomes the base case. The final meeting of the year ends December 9.
All the 2027 figures we track, with the date each one becomes official, are on the 2027 numbers page.
Questions people ask
What did the Fed decide on September 16, 2026?
It raised the federal funds rate by 0.25 percentage point, to a target range of 3.75% to 4%. The vote was 12-0.
Will the Fed raise rates again in 2026?
Most officials expect it to. In the projections released with the decision, 12 of 18 participants penciled in one more quarter-point increase this year, which would put the range at 4% to 4.25%. A projection is not a commitment.
Does this raise my mortgage or credit card rate right away?
Credit card and other variable rates usually follow within one or two billing cycles. Fixed mortgage rates move with the bond market, which often reacts before the Fed does. An existing fixed-rate loan does not change.
When is the next Fed decision?
The next meeting ends October 28, 2026. The last one of the year ends December 9.