Updated September 16, 2026
As of its September 15-16, 2026 meeting, the Federal Reserve announced that it is raising the federal funds rate by a quarter percentage point, to 3.75% to 4%. This is the sixth rate announcement of 2026 and the first rate change of the year. The previous five announcements, in January, March, April, June and July, all left the rate unchanged. The decision came after the Federal Open Market Committee’s September meeting.
The federal funds rate is the rate banks charge each other for overnight lending. It is not a mortgage rate, and mortgage rates do not automatically move with it.
According to the Federal Reserve’s press release, the FOMC approved the statement by a 12-0 vote and decided to raise the target range for the federal funds rate to 3.75% to 4%. There were no dissenting votes. At the July meeting, three members dissented in favor of a quarter-point increase: Beth M. Hammack, Neel Kashkari and Lorie K. Logan.
The FOMC statement described economic activity as expanding at a solid pace and said domestic spending has been resilient, while noting that uncertainty remains elevated owing in part to geopolitical developments. The statement described productivity growth as strong and capital investment as robust. It said job gains have kept pace with the workforce and that the unemployment rate has changed little. The committee stated that inflation remains elevated and that the rate increase will support a timelier return to its 2 percent goal.
The committee also stated that it is continuing its policy of maintaining ample reserves in the banking system. This was Chair Kevin Warsh’s third FOMC meeting as chairman, following Jerome Powell’s departure in May. As at the June and July meetings, the post-meeting statement was shorter than what had become standard practice.
What the Federal Funds Rate Does and Does Not Control
The federal funds rate is the target range the FOMC sets for the rate depository institutions charge one another for overnight loans. It influences short-term borrowing costs across the economy, including credit cards, auto loans and home equity lines of credit, which are commonly tied to the prime rate.
Long-term mortgage rates work differently. The 30-year fixed mortgage rate tracks the 10-year Treasury yield more closely than it tracks the federal funds rate. Treasury yields respond to bond market demand, inflation expectations and investor appetite for risk. A Fed rate change is one input among several rather than a direct lever on what a buyer is quoted.
Federal Reserve Rate Decisions in 2026
| Meeting | Decision | Target range |
|---|---|---|
| January 28-29 | No change | 3.5% to 3.75% |
| March 17-18 | No change | 3.5% to 3.75% |
| April 28-29 | No change | 3.5% to 3.75% |
| June 16-17 | No change | 3.5% to 3.75% |
| July 28-29 | No change | 3.5% to 3.75% |
| September 15-16 | Raised 0.25 | 3.75% to 4% |
The Federal Reserve’s 2026 Interest Rate Announcement Schedule
For ongoing coverage, see our market updates.
The Federal Open Market Committee (FOMC) meets eight times a year and announces its decision on what to do with the benchmark interest rate. The schedule for 2026 is as follows:
- January 28-29
- March 17-18
- April 28-29
- June 16-17
- July 28-29
- September 15-16
- October 27-28
- December 8-9
Read the full September 16th FOMC statement below:
The Federal Open Market Committee approved the following statement for release by a 12 – 0 vote:
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 Committee is continuing its policy of maintaining ample reserves in the banking system.
Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little.
Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal. The Committee will deliver price stability.
What is the Benchmark Interest Rate and What Does it Mean for Homebuyers and Homeowners?
Interest rate decisions can have a direct impact on your wallet. When buying a home, most people need to borrow the required funds in the form of a mortgage. The mortgage interest rate refers to the percentage a borrower pays to a lender on the funds borrowed for the purchase. Your lender determines your interest rate based on factors including credit risk, loan type and market conditions.
Your mortgage rate is not the same as the benchmark rate. The federal funds rate is set by the Federal Open Market Committee at its scheduled meetings and shapes short-term borrowing costs across the economy. Mortgage rates respond mainly to the 10-year Treasury yield and to lender-specific factors including your debt-to-income ratio and credit score.
Understanding how rate decisions flow through to mortgage pricing can help you plan a purchase. More guidance for buyers is in the Home Buyer’s Hub. When you are ready to start home hunting, your REMAX agent will be there to help guide you.
Frequently Asked Questions
What did the Federal Reserve decide in September 2026?
The FOMC raised the target range for the federal funds rate by a quarter percentage point, to 3.75% to 4%. The vote was 12-0 with no dissents. It was the first rate change of 2026 after five consecutive meetings that left the rate unchanged.
What is the federal funds rate?
The federal funds rate is the target range the Federal Open Market Committee sets for the rate banks charge each other for overnight loans. The Fed does not set consumer loan rates directly. It sets this benchmark, and other rates respond to it in varying degrees.
Does a Fed rate hike raise mortgage rates?
Not automatically. The 30-year fixed mortgage rate follows the 10-year Treasury yield more closely than the federal funds rate. Treasury yields move on inflation expectations, bond market demand and investor sentiment. Mortgage rates have moved in the opposite direction from an FOMC decision in past cycles.
What loans does the federal funds rate affect most directly?
Short-term and variable-rate borrowing responds most closely, including credit cards, home equity lines of credit and auto loans. Many of these are tied to the prime rate, which generally moves with the federal funds rate.
Why did the Fed raise rates?
The FOMC statement said inflation remains elevated and that the rate increase will support a timelier return to the committee’s 2 percent goal. The statement also described economic activity as expanding at a solid pace, with resilient domestic spending, strong productivity growth and robust capital investment.
When is the next Federal Reserve interest rate announcement?
The next FOMC meeting is scheduled for October 27-28, 2026.
