Fed rate decision · 16 September 2026
Policy rate raised by 25 bp to 3.75–4.00%.
Decision
Fed funds target range
Expectation before the decision
New York Fed Survey of Market Expectations, September 2026 round — responses collected by 08 September 2026, before the decision; median expectation
hawkish surprise (+25 bp) The decision was 25 basis points tighter than expected (the rate is higher than expected).
- Hike
- 47.0%
- Hold
- 52.0%
- Cut
- 0.0%
Participants' average probability for the actual outcome: 47%.
A gap below 10 basis points counts as in line, 25 basis points or more as a surprise, and anything between as "slightly". Only expectations formed after the previous decision and before this one are used. How are expectations measured? · Source
What changed in the statement?
The Fed raised the target range by 25 basis points to 3.75–4.00%; the decision was unanimous this time and the statement says the move will support a timelier return of inflation to the 2% goal.
- The target range was raised by 1/4 percentage point instead of being held; the new range is 3.75–4.00%.
- The vote moved from 9–3 to 12–0: Hammack, Kashkari and Logan, who dissented in July in favour of a hike, are no longer dissenting.
- The reference to supply shocks in sectors such as energy was dropped from the inflation paragraph and replaced by a sentence saying today's action will support a timelier return of inflation to the 2% goal.
- The assessment of the economy replaced the direct reference to the Middle East conflict with 'geopolitical developments' and added that domestic spending has been resilient; productivity growth is described as strong and capital investment as robust.
Tone of the statement: more hawkish than the previous one — Alongside the hike, the emphasis on a 'timelier' return of inflation to target and on resilient domestic demand pushes the statement in a tightening direction.
The summary and tone assessment were produced by a language model (claude-code/opus, prompt version 1); they are no substitute for the official text.
Difference from the previous statement
46 words added, 82 words removed. Additions are underlined, removals struck through.
The Federal Open Market Committee approved the following statement for release by a [removed: 9] [added: 12] – [removed: 3] [added: 0] vote:
The Committee decided to [removed: maintain] [added: raise] the target range for the federal funds rate [removed: at 3-1/2] [added: by 1/4 percentage point] to 3-3/4 [added: to 4] percent, in support of the Federal Reserve's dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.
Economic activity is expanding at a solid [removed: pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East.] [added: pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient.] Productivity growth [added: is strong,] and capital investment [removed: are strong.] [added: is robust.] Job gains have kept pace with the workforce, and the unemployment rate has changed little.
[removed: Inflation remains elevated relative to the Committee's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy.] [added: Inflation remains elevated. Today's policy action will support a timelier return to the Committee's 2 percent goal.] The Committee will deliver price stability.
[removed: Voting against the monetary policy action were Beth M. Hammack, Neel Kashkari, and Lorie K. Logan, who preferred to raise the target range for the federal funds rate by 1/4 percentage point at this meeting.]
Source: Board of Governors of the Federal Reserve System. The text is in the public domain. Official statement →