Francisco Uría (Spanish Institute of Analysts).At the Federal Reserve’s Federal Open Market Committee (FOMC) meeting held on September 15–16, 2026, it was decided to raise the target range for the federal funds rate by 25 basis points to 3.75%–4.00%. The decision was adopted unanimously, with a vote of 12 in favor and zero against.
This marks the Federal Reserve’s first rate hike since July 2023, and the first decided since Kevin Warsh assumed the presidency of the institution. The unanimity of the vote contrasts with the dissent of three members—Hammack, Kashkari, and Logan—who supported raising rates as early as the previous meeting on July 29: what was then a minority position has now become the consensus of the entire Committee.
The decision was reasonably expected by the market, which had been assigning a high probability to this hike for weeks following Warsh’s speech at Jackson Hole (August 26) and the inflation uptick reported in August. Consequently, markets remained stable following the announcement, with no sharp movements in either fixed income or equities, and the yield curve reaction (see item 6) had already been largely priced in during the sessions leading up to the meeting.
2. Reading the statement: change in tone
The statement maintains the description of economic activity that “expands at a solid pace,” with “resilient domestic spending,” “strong productivity growth,” and “robust capital investment,” and reiterates that “job creation has kept pace with the labor force, with little change in the unemployment rate.”
The most significant shift in tone lies in the added sentence on inflation: after repeating that “inflation remains elevated,” the FOMC incorporates a new phrase—”the policy action taken today will support a faster return to the Committee’s 2% target”—which did not appear in the July statement. In practice, this serves as the explicit justification for the hike: acting now to accelerate the convergence of inflation, rather than waiting for it to ease on its own.
The statement no longer attributes uncertainty exclusively to the “conflict in the Middle East,” but rather describes it more generically as stemming, “in part, from geopolitical developments,” a broader formulation than that of the previous two meetings.
Long-term framework: Fed vs. ECB
With this hike, the Fed sets its rate range at 3.75%–4.00% (midpoint 3.88%), the highest level since November 2023, and narrows the spread with the ECB’s deposit rate (2.50%) to around 138 basis points. It is noteworthy that, taking the decisions of both central banks together rather than individually, the last two monetary policy rulings on both sides of the Atlantic—the ECB’s on September 10 and the Fed’s today—have both been rate hikes, something that had not occurred since the final stretch of the 2022–2023 cycle.
