BREAKING: Federal Reserve Announces Interest Rate Change

The Federal Reserve raised its benchmark interest rate Wednesday, delivering its first increase in more than three years as stubborn inflation forced a reversal of last year’s cuts.

The unanimous decision puts new Fed Chairman Kevin Warsh on a potentially rocky path with President Donald Trump, who picked him to lead the central bank after repeatedly demanding lower rates.

All 12 voting members backed the quarter-percentage-point increase, bringing the target range to 3.75% to 4%. The move wipes out one of the three rate cuts approved last year and marks the first major interest rate action under Warsh.

Inflation has gained ground since early this year as the war with Iran rattled energy markets. Months of fighting in the Middle East have left officials confronting the risk that those price pressures will spread through the economy and become harder to stamp out.

The enormous expansion of artificial intelligence infrastructure has added another concern, with officials weighing whether the spending boom could further fuel inflation.

🚨 BREAKING: The Federal Reserve has just RAISED interest rates by 25 basis points, to 3.75%–4.00%

UNANIMOUS VOTE.

A DIRECT opposition to President Trump calling for rates being slashed. UNBELIEVABLE!

Trump is right: America needs to be the LOWEST RATES in the WORLD. Many… pic.twitter.com/4e6JpI9vAU

— Eric Daugherty (@EricLDaugh) September 16, 2026

The Federal Reserve laid out its decision in Wednesday’s statement:

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“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.”

The decision underscores the challenge facing Warsh: Inflation remains above the central bank’s target, while its own assessment shows an economy still supported by resilient spending, strong productivity and robust investment.

For Trump, who has pressed for cheaper borrowing, his chosen Fed chairman’s first major move takes rates in the opposite direction.

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