The Federal Reserve raised its benchmark interest rate by a quarter percentage point, its first hike since 2023, as Chairman Warsh said inflation is still too high. Stocks fell on the news.
Key facts
- The Federal Reserve raised its benchmark interest rate by a quarter percentage point.
- It is the Fed's first rate hike since 2023, according to CNBC.
- Chairman Warsh said inflation is still too high.
- The Dow fell 400 points following the announcement, per CNBC.
The Federal Reserve raised its benchmark interest rate by a quarter percentage point, according to CNBC’s live coverage of the central bank’s meeting on September 16, 2026.
The move marks the Fed’s first rate hike since 2023, CNBC reported, signaling a potential shift after a prolonged pause in tightening.
Chairman Warsh said inflation is still too high, according to CNBC, framing the decision as a response to continued price pressures.
Financial markets reacted negatively to the announcement. The Dow fell 400 points after the Fed hiked rates and Warsh’s remarks, CNBC reported.
Ahead of the decision, traders had been bracing for the possibility of a new rate hiking cycle from the Federal Reserve, according to CNBC.
The combination of a fresh rate increase and the chairman’s warning on inflation raised questions about whether the quarter-point move represents the start of further tightening.
Why it matters
Interest rate decisions by the Federal Reserve directly affect borrowing costs for mortgages, credit cards and business loans, as well as the value of investments. A first hike since 2023, paired with a warning that inflation is still too high, signals households and markets may face higher costs ahead.
Frequently asked questions
How much did the Fed raise interest rates?
The Federal Reserve raised its benchmark interest rate by a quarter percentage point, according to CNBC.
When was the Fed's last rate hike before this one?
According to CNBC, this is the Fed's first rate hike since 2023.
How did the stock market react?
The Dow fell 400 points after the Fed hiked rates and Chairman Warsh said inflation is still too high, CNBC reported.