The Federal Open Market Committee (FOMC) on September 16, 2026 approved a 1/4 percentage point increase in the target range for the federal funds rate, lifting it to 3-3/4 to 4 percent. The decision, announced in a statement released at 2:00 p.m. EDT, was approved by a unanimous 12–0 vote, according to the Federal Reserve's official press release.

The 12–0 tally reflects agreement across the committee's twelve voting members — the seven Federal Reserve governors, the president of the Federal Reserve Bank of New York, and four regional bank presidents who vote on a rotating basis.

"The Committee decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, in support of the Federal Reserve's dual mandate," the statement said. The Committee also confirmed that it "is continuing its policy of maintaining ample reserves in the banking system."

In its assessment of the economy, the Committee said economic activity is expanding at a solid pace. While uncertainty remains elevated owing in part to geopolitical developments, domestic spending has been resilient, the statement noted. It described productivity growth as strong and capital investment as robust, adding that job gains have kept pace with the workforce and that the unemployment rate has changed little.

On prices, the Committee reiterated that inflation "remains elevated" and said, "Today's policy action will support a timelier return to the Committee's 2 percent goal." "The Committee will deliver price stability," the statement concluded.

The quarter-point increase typically passes through to the rates consumers and businesses pay on mortgages, credit cards, auto loans, and business credit, as well as the yields offered on savings products. Decisions of this kind are also watched closely across financial markets, including digital-asset markets, because the policy rate influences Treasury yields, dollar liquidity conditions, and the cost of leveraged positions — variables that shape risk appetite across asset classes. Under the Fed's longstanding practice, minutes of the meeting are released three weeks after the gathering, and the committee's remaining scheduled meetings this year will offer the next opportunities to assess whether the Committee's stance shifts further.

Background

The FOMC is the monetary policymaking body of the Federal Reserve System and holds eight regularly scheduled meetings per year. The federal funds rate — the rate at which depository institutions lend reserve balances to one another overnight — is the U.S. central bank's principal policy tool and shapes borrowing costs across the economy. The "dual mandate" cited in the statement refers to the Fed's congressionally mandated goals of maximum employment and price stability.

The statement's reference to "ample reserves" describes the operating framework in which the Fed supplies enough reserves to the banking system that policy is carried out primarily through administered interest rates rather than by managing the daily supply of reserves.

An Implementation Note was issued on September 16, 2026, alongside the statement. Media inquiries may be directed to the Federal Reserve's press office at 202-452-2955.