Fed Hikes Fed Funds Rate to 3.75%-4% Amid Ongoing Inflation Battle

The Federal Reserve's Federal Open Market Committee (FOMC) made its sixth decision of the year, voting to raise the federal funds rate by 25 basis points. This brings the target range to 3.75%-4%, a significant move in the ongoing battle against inflation.

Markets had anticipated this move, pricing in one more 25-basis-point interest rate hike in 2026, followed by continuing rate hikes extending into 2027. Fed officials' year-end rate projections are between 4.1% and 4.4%, as seen on the September 2026 dot plot.

This decision marks the first time the benchmark has been raised since June. The move is aimed at keeping inflation in check, with the FOMC emphasizing its commitment to price stability.