Fed Hikes Rates Amid Trump Pressure

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%, with Fed Chair Kevin Warsh stating 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 Warsh warning that higher borrowing costs may be necessary.

Mortgage rates generally track the 10-year Treasury yield, which reached 5% for the first time in three years before the decision.