The US Federal Reserve, at its meeting on September 15–16, raised the target range for the federal funds rate by 25 basis points to 3.75–4% per annum. According to Xinhua, this is the first increase since July 2023; the decision was supported by all 12 members of the Federal Open Market Committee (FOMC).
In its statement, the FOMC said inflation remains elevated and that the action will support a more timely return to the 2% goal. Fed Chair Kevin Warsh said at a press conference that inflation has been too high for too long, and called the unanimous vote evidence of determination to achieve price stability. He did not, however, signal a course toward a series of increases.
Updated projections from FOMC participants assume US GDP growth of 2.3% in 2026 (versus 2.2% in June) and unemployment at 4.1% (versus 4.3%). PCE inflation is expected at 3.7% in 2026 and 2.3% in 2027. Most officials expect the rate to be in the 4–4.25% range by the end of 2026.
After the decision, major US indices reversed downward, the yield on 10-year Treasuries rose to 5.012%, and the dollar index gained 0.6% to 100.3. Analysts interpreted the vote as a hawkish signal. The Fed has two more meetings scheduled before the end of 2026.
Source: Xinhua