FOMC · Signed Brief

FOMC Raises Federal Funds Rate to 3-3/4 to 4 Percent in Unanimous 12-0 Vote

The Federal Open Market Committee raised the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent on September 16, 2026, by a unanimous 12-0 vote. The Committee stated that inflation "remains elevated" and that the action "will support a timelier return to the Committee's 2 percent goal".

By — Founder, Kitalpha Finance
Published 16 September 2026

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Meeting on September 16, 2026, the Federal Open Market Committee voted unanimously — 12 to 0 — to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent [E0]“September 16, 2026” — FOMC statement, 2026-09-16. federalreserve.gov ↗[E1]“The Federal Open Market Committee approved the following statement for release by a 12 – 0 vote:” — FOMC statement, 2026-09-16. federalreserve.gov ↗[E2]“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.” — FOMC statement, 2026-09-16. federalreserve.gov ↗.

This is the first rate hike in the statements on Kitalpha's record since July 2024 [S1]this is the first rate hike in the statements Kitalpha holds, which begin July 2024 (2024-07-31); there is NO earlier hike on record here, so do NOT claim a specific "since" date. A record claim must NAME its window — phrase it EXACTLY as "the first rate hike in the statements on Kitalpha's record since July 2024" — Computed deterministically from the FOMC statements' parsed target ranges. federalreserve.gov ↗.

At its July 29, 2026, meeting, the Committee voted 9 to 3 to maintain the target range at 3-1/2 to 3-3/4 percent, with Beth M. Hammack, Neel Kashkari, and Lorie K. Logan dissenting in favor of a 1/4 percentage point increase [Ep0]“July 29, 2026” — FOMC statement, 2026-07-29. federalreserve.gov ↗[Ep1]“The Federal Open Market Committee approved the following statement for release by a 9 – 3 vote:” — FOMC statement, 2026-07-29. federalreserve.gov ↗[Ep2]“The Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent, in support of the Federal Reserve's dual mandate.” — FOMC statement, 2026-07-29. federalreserve.gov ↗[Ep9]“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.” — FOMC statement, 2026-07-29. federalreserve.gov ↗.

The September statement describes economic activity as expanding at a "solid pace" and notes that "domestic spending has been resilient" amid uncertainty "owing, in part, to geopolitical developments" [E4]“Economic activity is expanding at a solid pace.” — FOMC statement, 2026-09-16. federalreserve.gov ↗[E5]“While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient.” — FOMC statement, 2026-09-16. federalreserve.gov ↗; the July 29, 2026, statement described activity as expanding at a "solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East" [Ep0]“July 29, 2026” — FOMC statement, 2026-07-29. federalreserve.gov ↗[Ep4]“Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East.” — FOMC statement, 2026-07-29. federalreserve.gov ↗.

The current statement characterizes capital investment as "robust" while describing productivity growth as "strong" [E6]“Productivity growth is strong, and capital investment is robust.” — FOMC statement, 2026-09-16. federalreserve.gov ↗; the prior statement described both "Productivity growth and capital investment" as "strong" [Ep0]“July 29, 2026” — FOMC statement, 2026-07-29. federalreserve.gov ↗[Ep5]“Productivity growth and capital investment are strong.” — FOMC statement, 2026-07-29. federalreserve.gov ↗.

The Committee said inflation "remains elevated" and that "Today's policy action will support a timelier return to the Committee's 2 percent goal" [E8]“Inflation remains elevated.” — FOMC statement, 2026-09-16. federalreserve.gov ↗[E9]“Today's policy action will support a timelier return to the Committee's 2 percent goal.” — FOMC statement, 2026-09-16. federalreserve.gov ↗.

Policymakers described economic activity as expanding at a "solid pace," with job gains having "kept pace with the workforce" and the unemployment rate having "changed little" [E4]“Economic activity is expanding at a solid pace.” — FOMC statement, 2026-09-16. federalreserve.gov ↗[E7]“Job gains have kept pace with the workforce, and the unemployment rate has changed little.” — FOMC statement, 2026-09-16. federalreserve.gov ↗.

The statement said the Committee "will deliver price stability" [E10]“The Committee will deliver price stability.” — FOMC statement, 2026-09-16. federalreserve.gov ↗.

Data available to policymakers as of the September 16, 2026 decision showed the Consumer Price Index up 3.4% over the 12 months through August 2026 [N1]Headline CPI: +3.4% over the 12 months through August 2026 (as known on September 16, 2026) — U.S. Bureau of Labor Statistics, retrieved via ALFRED vintage as of September 16, 2026. fred.stlouisfed.org ↗.

Core consumer prices, which exclude food and energy, rose 2.4% over the 12 months through August 2026 [N2]Core CPI: +2.4% over the 12 months through August 2026 (as known on September 16, 2026) — U.S. Bureau of Labor Statistics, retrieved via ALFRED vintage as of September 16, 2026. fred.stlouisfed.org ↗.

The unemployment rate stood at 4.1% in August 2026 [N3]Unemployment rate: 4.1% in August 2026 (as known on September 16, 2026) — U.S. Bureau of Labor Statistics, retrieved via ALFRED vintage as of September 16, 2026. fred.stlouisfed.org ↗.

Nonfarm payroll employment rose by 162,000 in August 2026 [N4]Nonfarm payrolls: +162,000 in August 2026 (as known on September 16, 2026) — U.S. Bureau of Labor Statistics, retrieved via ALFRED vintage as of September 16, 2026. fred.stlouisfed.org ↗.

The headline PCE price index rose 3.7% over the 12 months through July 2026 [N5]Headline PCE: +3.7% over the 12 months through July 2026 (as known on September 16, 2026) — U.S. Bureau of Economic Analysis, retrieved via ALFRED vintage as of September 16, 2026. fred.stlouisfed.org ↗.

Core PCE prices, which exclude food and energy, rose 3.3% over the 12 months through July 2026 [N6]Core PCE: +3.3% over the 12 months through July 2026 (as known on September 16, 2026) — U.S. Bureau of Economic Analysis, retrieved via ALFRED vintage as of September 16, 2026. fred.stlouisfed.org ↗.

Prior to the decision, Kalshi markets, as of 2026-09-16T17:01:00.298+00:00, placed an 88.5% probability on the federal funds rate upper bound exceeding 3.75 percent and a 1.0% probability on it exceeding 4.00 percent [M5]Will the upper bound of the federal funds rate be above 3.75% following the Fed's Sep 16, 2026 meeting?: 88.5% — Kalshi, implied probability as of 2026-09-16T17:01:00.298+00:00. [M6]Will the upper bound of the federal funds rate be above 4.00% following the Fed's Sep 16, 2026 meeting?: 1.0% — Kalshi, implied probability as of 2026-09-16T17:01:00.298+00:00. .

Polymarket, as of 2026-09-16T17:01:00.298+00:00, assigned an 87.5% probability to a 25-basis-point rate increase and 11.5% to no change in rates [M7]Will the Fed increase interest rates by 25 bps after the September 2026 meeting?: 87.5% — Polymarket, implied probability as of 2026-09-16T17:01:00.298+00:00. [M8]Will there be no change in Fed interest rates after the September 2026 meeting?: 11.5% — Polymarket, implied probability as of 2026-09-16T17:01:00.298+00:00. .

The next scheduled FOMC meeting is scheduled to conclude on October 28, 2026 [C1]Next scheduled FOMC meeting: October 28, 2026 — FOMC meeting calendar, federalreserve.gov. federalreserve.gov ↗.

Sources

  1. [E0]“September 16, 2026” — FOMC statement, 2026-09-16. federalreserve.gov ↗
  2. [E1]“The Federal Open Market Committee approved the following statement for release by a 12 – 0 vote:” — FOMC statement, 2026-09-16. federalreserve.gov ↗
  3. [E2]“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.” — FOMC statement, 2026-09-16. federalreserve.gov ↗
  4. [S1]this is the first rate hike in the statements Kitalpha holds, which begin July 2024 (2024-07-31); there is NO earlier hike on record here, so do NOT claim a specific "since" date. A record claim must NAME its window — phrase it EXACTLY as "the first rate hike in the statements on Kitalpha's record since July 2024" — Computed deterministically from the FOMC statements' parsed target ranges. federalreserve.gov ↗
  5. [Ep0]“July 29, 2026” — FOMC statement, 2026-07-29. federalreserve.gov ↗
  6. [Ep1]“The Federal Open Market Committee approved the following statement for release by a 9 – 3 vote:” — FOMC statement, 2026-07-29. federalreserve.gov ↗
  7. [Ep2]“The Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent, in support of the Federal Reserve's dual mandate.” — FOMC statement, 2026-07-29. federalreserve.gov ↗
  8. [Ep9]“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.” — FOMC statement, 2026-07-29. federalreserve.gov ↗
  9. [E4]“Economic activity is expanding at a solid pace.” — FOMC statement, 2026-09-16. federalreserve.gov ↗
  10. [E5]“While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient.” — FOMC statement, 2026-09-16. federalreserve.gov ↗
  11. [Ep4]“Economic activity is expanding at a solid pace despite elevated uncertainty that owes, in part, to the conflict in the Middle East.” — FOMC statement, 2026-07-29. federalreserve.gov ↗
  12. [E6]“Productivity growth is strong, and capital investment is robust.” — FOMC statement, 2026-09-16. federalreserve.gov ↗
  13. [Ep5]“Productivity growth and capital investment are strong.” — FOMC statement, 2026-07-29. federalreserve.gov ↗
  14. [E8]“Inflation remains elevated.” — FOMC statement, 2026-09-16. federalreserve.gov ↗
  15. [E9]“Today's policy action will support a timelier return to the Committee's 2 percent goal.” — FOMC statement, 2026-09-16. federalreserve.gov ↗
  16. [E7]“Job gains have kept pace with the workforce, and the unemployment rate has changed little.” — FOMC statement, 2026-09-16. federalreserve.gov ↗
  17. [E10]“The Committee will deliver price stability.” — FOMC statement, 2026-09-16. federalreserve.gov ↗
  18. [N1]Headline CPI: +3.4% over the 12 months through August 2026 (as known on September 16, 2026) — U.S. Bureau of Labor Statistics, retrieved via ALFRED vintage as of September 16, 2026. fred.stlouisfed.org ↗
  19. [N2]Core CPI: +2.4% over the 12 months through August 2026 (as known on September 16, 2026) — U.S. Bureau of Labor Statistics, retrieved via ALFRED vintage as of September 16, 2026. fred.stlouisfed.org ↗
  20. [N3]Unemployment rate: 4.1% in August 2026 (as known on September 16, 2026) — U.S. Bureau of Labor Statistics, retrieved via ALFRED vintage as of September 16, 2026. fred.stlouisfed.org ↗
  21. [N4]Nonfarm payrolls: +162,000 in August 2026 (as known on September 16, 2026) — U.S. Bureau of Labor Statistics, retrieved via ALFRED vintage as of September 16, 2026. fred.stlouisfed.org ↗
  22. [N5]Headline PCE: +3.7% over the 12 months through July 2026 (as known on September 16, 2026) — U.S. Bureau of Economic Analysis, retrieved via ALFRED vintage as of September 16, 2026. fred.stlouisfed.org ↗
  23. [N6]Core PCE: +3.3% over the 12 months through July 2026 (as known on September 16, 2026) — U.S. Bureau of Economic Analysis, retrieved via ALFRED vintage as of September 16, 2026. fred.stlouisfed.org ↗
  24. [M5]Will the upper bound of the federal funds rate be above 3.75% following the Fed's Sep 16, 2026 meeting?: 88.5% — Kalshi, implied probability as of 2026-09-16T17:01:00.298+00:00.
  25. [M6]Will the upper bound of the federal funds rate be above 4.00% following the Fed's Sep 16, 2026 meeting?: 1.0% — Kalshi, implied probability as of 2026-09-16T17:01:00.298+00:00.
  26. [M7]Will the Fed increase interest rates by 25 bps after the September 2026 meeting?: 87.5% — Polymarket, implied probability as of 2026-09-16T17:01:00.298+00:00.
  27. [M8]Will there be no change in Fed interest rates after the September 2026 meeting?: 11.5% — Polymarket, implied probability as of 2026-09-16T17:01:00.298+00:00.
  28. [C1]Next scheduled FOMC meeting: October 28, 2026 — FOMC meeting calendar, federalreserve.gov. federalreserve.gov ↗