Fed Hikes Interest Rates Despite Trump's Calls for Cuts

The Federal Reserve raised its benchmark interest rate by one-quarter of a percentage point on September 16, 2026, marking its first increase since 2023. The decision was unanimous, with all 12 policymakers voting to lift the federal funds rate to a range of 3.75% to 4%. Fed Chair Kevin Warsh stated that the action supports the Federal Reserve's dual mandate.

The interest rate hike came despite President Donald Trump's calls for lower borrowing costs. Trump urged the Fed to cut rates or leave them unchanged, citing the US as 'the Best Credit in the World -- BY FAR' and claiming the country is 'BOOMING with new Investment!'

The decision follows weeks of market expectations that Warsh and other policymakers would act to counter inflation. The increase will support a timelier return to the Committee's 2 percent goal, according to Warsh.