Fed Hikes Interest Rate Despite Trump's Calls

The Federal Reserve raised its benchmark interest rate by one-quarter of a percentage point on September 16, 2026, despite President Donald Trump's calls for lower borrowing costs.

The unanimous 12-0 decision lifted the federal funds rate to a range of 3.75% to 4%, marking the Fed's first increase since 2023.

Fed Chair Kevin Warsh explained that '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.'

The increase came after weeks of market expectations that policymakers would act to counter inflation, with the yield on the 10-year Treasury note reaching 5% for the first time in three years.