The Federal Reserve raised the target range for the federal funds rate by a quarter point on 16 September 2026, to 3.75%–4%. The Federal Open Market Committee voted 12–0. The institution said the move supports its dual mandate of maximum employment and price stability.

The statement said economic activity is expanding at a solid pace, the unemployment rate has changed little and inflation remains elevated. The policy action is intended to support a timelier return to the 2% goal. The Committee is continuing a policy of ample reserves in the banking system.

The federal funds rate does not rewrite every loan contract. Mortgage costs, corporate funding and currencies move through market transmission, not by a decree over each credit line.

The implementation note, effective 17 September, raised the interest rate on reserve balances to 3.90% and the primary credit rate by a quarter point to 4%. Overnight repo and reverse-repo operations were aligned with the new range.

Later meetings will depend on data covering inflation, activity and the labour market. Market-implied probabilities are not a Federal Reserve commitment. This account stops at the decision taken, not at a schedule of further hikes.

The source is the 16 September FOMC statement, not a broker note. The article does not attribute commercial lending rates to the central bank.

The 3.75%–4% range is the fact. Market reactions in the hours that followed would need a separate time and source; this text does not invent them.

Image: AgnosticPreachersKid, Marriner S. Eccles Federal Reserve Board Building, Washington, CC BY-SA 3.0, Wikimedia Commons.

Source consulted: Federal Reserve issues FOMC statement — 16 September 2026.