Federal Reserve raises interest rates for the first time since 2023
The Fed increased its benchmark rate by 0.25 percentage points to battle resurgent inflation driven by soaring energy prices.
Updated on: September 16, 2026 / 3:03 PM EDT / CBS News
The Federal Reserve raised interest rates for the first time since 2023 on Wednesday, reversing course as the Iran war drives up global energy prices and fuels inflation.
The Fed raised the federal funds rate by 0.25 percentage points, bringing its target range to between 3.75% and 4% — its highest level since December 2025. The benchmark rate influences borrowing costs across the U.S. economy, including for credit cards, auto loans and personal loans.
In a set of quarterly projections, the Fed also signaled that its rate-setting committee expects to again raise rates later this year. The vote to raise the benchmark rate was unanimous, the Fed said in a statement on Wednesday.
For now, however, the Fed's move doesn't appear to point to a more aggressive push to raise borrowing costs. Federal Reserve Chairman Kevin Warsh said at a press conference on Wednesday that the Federal Open Market Committee (FOMC) expects to hold rates steady throughout 2027.
About half of FOMC members predicted that rates would hold steady next year.