The Federal Reserve on Wednesday raised its benchmark interest rate by 0.25% bringing the central bank’s flagship rate to between 3.75% and 4.00%.
This is the first interest rate increase by the Fed since 2023.
BREAKING: The Fed raises interest rates to battle inflation, defying Trump’s call for a cut. https://t.co/2ddTNX4Ltp
— NBC News (@NBCNews) September 16, 2026
Via NBC News:
The Fed’s policymakers unanimously supported the rate hike and signaled one more interest rate hike could come before the end of the year.
The Fed’s decision, which defied the president’s wishes for lower interest rates, is in response to elevated inflation readings as the war with Iran drives up prices.
The hike could also be the start of a rate-hiking cycle. Historically, when a central bank raises rates once, it follows that up with additional increases.
The Fed’s interest rate move comes after a more than 75% surge in the price of oil this year. That has translated into gas prices that have soared more than 45% since the Iran war began.
Mortgage rates had already risen sharply in anticipation of the move, climbing to 7%. That is adding strain to the housing market, following a slowdown in home sales last month.
In February, Donald Trump told NBC News his then-nominee for Fed chair, Kevin Warsh, would not have received the job offer had he expressed a desire to raise interest rates.
Trump said there was “not much” doubt in his mind that interest rates would soon be lowered. Pressed about how he could be so sure, he said: “I just think they’re going to be lowered. I mean, they should be lower.”
“We’re way high, OK?” Trump said. “We’re way high in interest.”
Less than four months into the job and Warsh is now presiding over a Fed increasing rates.
Trust and believe – ketchup will be flung at the White House today.
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