The Federal Reserve on Sept. 16 unsurprisingly and unanimously hiked the federal funds rate for the first time since July 2023 as disinflation from the post-Covid surge that began in 2021 was beginning to abate, a process that continued all the way to the beginning of 2026 before the war in Iran escalated.
The rate moved from a range of 3.5 percent to 3.75 percent to a range of 3.75 percent to 4 percent. The move comes after what had been three consecutive rate cuts in September, October and December 2025.In its Sept. 16 statement, the central bank pointed to sticky inflation as driving the decision to move interest rates higher: