Federal Reserve raises interest rates for the first time since 2023
Updated on: September 16, 2026 / 8:01 PM EDT / CBS News
TL;DR
- The Federal Reserve raised interest rates by 0.25 percentage points to combat rising inflation fueled by global energy prices.
- The federal funds rate is now in a target range of 3.75% to 4%, its highest level since December 2025.
- The Fed's quarterly projections suggest further rate increases are expected later this year, though policymakers anticipate holding rates steady throughout 2027.
- The Consumer Price Index rose 3.4% annually in August, exceeding the Fed's 2% target.
- President Trump has publicly called for lower interest rates.
- Stocks declined following Fed Chairman Kevin Warsh's comments, interpreted as hawkish and potentially signaling more rate hikes if needed.
- Higher borrowing costs are expected on credit cards and other loans, impacting consumers already facing increased prices for essentials.