The Federal Open Market Committee (FOMC) of the Federal Reserve unanimously raised the federal funds target range by 25 basis points to 3.75%-4.00%, saying inflation remained elevated and tighter policy would support a timelier return to its 2% goal while economic activity expanded at a solid pace. Over the past year, the FOMC cut the range by 25 basis points in September, October and December 2025, from 4.00%-4.25% to 3.50%-3.75%, then held it through July 2026. The Federal Reserve will continue maintaining ample reserves in the banking system. Median participant projections put 2026 personal consumption expenditures inflation at 3.7% and real gross domestic product growth at 2.3%, while job gains have kept pace with the workforce and unemployment has changed little. Uncertainty remains elevated partly because of geopolitical developments, although domestic spending has been resilient, productivity growth strong and capital investment robust. The median projected appropriate federal funds rate was 4.1% at end-2026 and end-2027, and the FOMC said it would deliver price stability.
2026-09-16Federal Reserve Board
Federal Reserve Board Raises Federal Funds Target Range by 25 Basis Points to 3.75%–4.00%
The Federal Open Market Committee unanimously raised the federal funds target range by 25 basis points to 3.75%-4.00%, citing elevated inflation and a solid pace of economic activity. Median projections put 2026 personal consumption expenditures inflation at 3.7%, real gross domestic product growth at 2.3%, and the appropriate federal funds rate at 4.1% at end-2026 and end-2027.