Fed meeting live updates: Fed hikes interest rates by 25 basis points as Warsh vows 'timelier return' to 2% inflation

Fed meeting live updates: Fed hikes interest rates by 25 basis points as Warsh vows 'timelier return' to 2% inflation Grace O'Donnell · Editor, Special Projects Updated Wed, September 16, 2026 at 11:00 PM GMT+2 1 min read The Federal Reserve voted to raise interest rates by 25 basis points on Wednesday to a range of 3. 75%-4% amid persistently high inflation. The decision was unanimous.

The median Fed official expects one more rate hike this year, according to the central bank's Summary of Economic Projections, also known as the dot plot . The move was the Fed's first increase in the fed funds rate since 2023, when the Jerome Powell-led central bank concluded its post-pandemic hiking campaign. It was also largely priced in by the market, even as Federal Reserve Chairman Kevin Warsh has been adamant about not providing markets with forward guidance.

Read more:  How the Fed rate decision affects your bank accounts, loans, credit cards, and investments Stocks were little changed when the decision was first announced but turned lower during Warsh's brief press conference. Here's a recap of what Warsh said in the presser: The Fed's focus remains trained on inflation: "Our predominant focus is on the price stability side of our mandate," Warsh stated. "The plain fact is that inflation is too high and has been for too long.

" Warsh stays mum on White House pressures: Warsh did not comment on concerns about Fed independence or President Trump's outspoken calls for lower interest rates. "We stay in our lane," Warsh said. "We'll let people that do trade policy and fiscal policy stay in their lane too.

" Warsh says Fed rate hike will be good for "least well-off" Americans: Warsh framed the Fed's policy decision as offering "good news" for Americans who don't own financial assets or have home equity built up. He said that price stability helps consumers because "when they get their wages, they can put their head above water and deliver real take-home pay increases. " LIVE COVERAGE IS OVER 45 updates Wed, September 16, 2026 at 9:00 PM UTC Grace O'Donnell What credit card users need to know about the Fed rate hike Yahoo Finance's Kendall Little reports: The Federal Reserve has increased rates for the first time in three years.

During the Federal Open Market Committee (FOMC) session on Sept. 16, 2026, the Fed lowered its target federal funds rate range by 25 basis points (a quarter percentage point). That brings the current target to 3.

75%-4. 00% and marks the first Fed rate hike since July 2023. Many credit cards have variable APRs, which mean they move over time.

While APRs don't directly follow federal interest rate movements, they do tend to move alongside Fed rate hikes and cuts. At the same time, average credit card rates increased significantly. In February 2022, before the rate hikes started, the average credit card interest rate was 14.

56%. By November 2022, it increased to 19. 07%.

After four more rate hikes in 2023, the average credit card interest rate by the end of that year was 21. 47%. Like it did then, the Fed's latest rate hike — and any future interest rate increases that follow — is likely to also increase credit card rates for borrowers.

Read more. Wed, September 16, 2026 at 8:42 PM UTC Grace O'Donnell How the Federal Reserve's rate hike impacts student loan interest rates Yahoo Finance's Ben Luthi reports: The Federal Reserve doesn't set student loan rates directly, but its federal funds rate influences the 10-year Treasury yield (which determines federal loan rates) and the prime rate (which determines private loan rates). But exactly how the Fed affects your cost of borrowing depends on the type of student loans and interest rate you have.

Federal student loans: The federal funds rate doesn't directly determine federal student loan interest rates, but it can influence them indirectly. Congress sets the federal student loan rates based on the 10-year Treasury note, adding a fixed margin each year. Private student loans: Private student loans are offered by banks, credit unions, and online lenders, many of which use the prime rate as a basis for setting their interest rates.

The prime rate moves alongside the Federal Reserve's rate decisions. So, when the Fed raises rates, new private loan rates usually rise, and when it cuts rates, they tend to fall. That said, how much this impacts you depends on your loan type.

Fixed-rate loans lock in one rate for the life of the loan, so if you borrow when rates are high, you'll keep that rate even if they later drop. Variable-rate loans, on the other hand, fluctuate with the market, so your rate and your payment can go up or down over time with the prime rate. Read more.

Wed, September 16, 2026 at 8:24 PM UTC Grace O'Donnell Stocks sink as investors see higher rates ahead US stock sank during Fed Chairman Kevin Warsh's press conference as investors priced in further rate hikes this year. The Dow Jones Industrial Average ( ^DJI ) closed over 600 points lower, falling 1. 2%, while the S&P 500 ( ^GSPC ) dropped 0.

4%. The Nasdaq Composite ( ^IXIC ) was little changed. Bond yields jumped, with the 10-year Treasury yield ( ^TNX ) rising above 5% again.

Bitcoin ( BTC-USD ) prices and the dollar index ( DX-Y. NYB ) also gained as the Fed's Summary of Economic Projections showed that officials expect slightly higher inflation in the remainder of the year. Wed, September 16, 2026 at 8:10 PM UTC Ben Werschkul White House official calls rate hike a 'rather unfortunate decision' The first reaction from the White House to Wednesday's interest rate hike came from Senior Deputy Press Secretary Kush Desai.

In an appearance on Fox News, Desai said this was a "rather unfortunate decision by the Federal Reserve" that was "not backed by a particularly compelling economic case. " He also reiterated President Trump's often-stated view that interest rates should be lower and claimed that the current price increases are "entirely driven by an energy supply shock. " That was at odds with Federal Reserve Chairman Kevin Warsh, who said Wednesday's action was taken in part to stem wider price increases.

The White House reaction also came after Trump's team has tried to telegraph a hands-off approach to the Federal Reserve in recent weeks. White House economic adviser Kevin Hassett told CNBC this week that "we're going to respect the process and understand that [Warsh] is doing what he and the committee think is correct. " Trump, in the past, has praised Warsh personally but repeatedly called for lower rates and called the Federal Open Market Committee "political" for not lowering rates.

Just this past weekend, the president again stated his view that the US should have the lowest interest rates in the world. Warsh voted along with his colleagues to raise rates but didn't offer a projection about future rate hikes and dodged a question during a press conference Wednesday afternoon about the White House reaction to the rate hike. "I've got nothing for you on a discussion with the president," Warsh said.

Wed, September 16, 2026 at 7:48 PM UTC Jennifer Schonberger Warsh: Fed can bring down inflation without hurting the job market Noting that the economy is essentially at full employment, Warsh said he thinks the Fed can tame inflation without depressing growth. "I don't believe that we need to do harm to the labor markets to achieve our objective," he said, in response to a question from Yahoo Finance. "I don't believe that the two parts of our mandate — price stability and full employment — are working at cross purposes over the medium term.

" In their updated dot plot — which Warsh did not participate in — FOMC members said they see the unemployment rate holding steady at 4. 1%, an improvement over the previous projection of 4. 3% Wed, September 16, 2026 at 7:43 PM UTC Grace O'Donnell Traders split on October rate-hike expectations After the Fed's dot plot suggested that most Federal Open Market Committee members see the need for at least one more 25 basis point rate hike this year, traders moved to price in increased odds of a second rate hike in October.

As Charles Schwab's Liz Ann Sonders pointed out, traders remained split on an October hike, per CME Group's FedWatch data. Traders have priced in a 50. 9% chance of a second 25 basis point rate hike in October, up from 43.

5% a day ago and 17. 6% a week ago. Wed, September 16, 2026 at 7:27 PM UTC Grace O'Donnell Former Federal Reserve president Loretta Mester says Fed made the 'right move' Former Cleveland Federal Reserve President Loretta Mester said that the Fed's rate hike on Wednesday was "the right move.

" "I think the case for raising rates at this point is very strong, and I think Kevin Warsh made the case … at Jackson Hole, and they followed through on it today," Mester said. "And I think the chair did a good job in the press conference of at least giving us the context of why the Fed made that decision today. " Mester also noted that the fact that it was a unanimous decision was also a surprise after several split decisions.

"I always think that the job of the chair is not just to count votes, but it's to forge that consensus. And Chair Wash did that today," Mester said. Wed, September 16, 2026 at 7:19 PM UTC Claire Boston Where will mortgage rates go in light of rate hike?

The Fed doesn't directly control mortgage rates, but its policy decisions do influence their direction. Rising oil prices and hotter inflation have pushed the average 30-year rate to a bruising 7. 19%, according to Mortgage News Daily.

Today's hike was already baked into current mortgage rates and other long-term yields, said Mortgage Bankers Association chief economist Mike Fratantoni. The MBA thinks two more hikes are in the cards in the next year, with mortgage rates staying around current levels. Other housing market watchers see things similarly.

"The pressure on mortgage rates was here even before the Fed rate hike, and it doesn't show signs of relenting," Danielle Hale, chief economist at Realtor. com, said in a statement. Wed, September 16, 2026 at 7:02 PM UTC Jake Conley Fed Chair Warsh pegs rise in long-term bond yields on economic growth, competition for capital, and geopolitics Bond yields have surged throughout the year, spurred upward by a multitude of factors, including the war in Iran launched by the US and Israel in February.

Earlier this week, the ten-year Treasury yield crossed above 5% to its highest level since 2007. Fed Chairman Warsh laid out three reasons he sees for the upward move in yields in his comments on Wednesday. "The economy has strengthened.

" "Competition for capital" has rushed upward, spurred in large part by the major capital needs of the AI hyperscalers that are "out in the market raising funding. " Geopolitical tensions around the world have seen commodity prices surge, driving up the cost for "products that find their way into stores across the country. " Wed, September 16, 2026 at 6:56 PM UTC Grace O'Donnell Warsh: 'Least well off have the most to gain' from Fed rate hike Fed Chairman Kevin Warsh said in his prepared remarks that the "least well off" in America could be the biggest beneficiaries from the Fed's rate hike in the long run if the central bank can deliver on its promise to bring down inflation.

"Those who are least well off have the most to gain from a durable expansion, a solid labor market, and stable prices," Warsh said. He later expanded on that answer, noting that the "least well off" Americans tend to be those who don't own financial assets — roughly half the country — and don't have equity in their home. They're often living paycheck to paycheck, he said.

"The thing that we can do consistent with our mandate is two things: Ask ourselves, is the country running more or less at full employment? And we've done that. That doesn't mean that individuals aren't searching for a job, but in aggregate, we're running more or less at full employment.

If so, we can then look at the other side of our mandate and let that be our focus. " "Stable prices, an environment where inflation is running consistent with our 2% objective, offers good news because that way, when they get their wages, they can put their head above water and deliver real take-home pay increases," Warsh said. Wed, September 16, 2026 at 6:53 PM UTC Jake Conley Fed Chair Warsh says central bank will 'stay in our lane' after questions about White House pressure Wed, September 16, 2026 at 6:42 PM UTC Jake Conley Asked about Middle East oil disruption, Fed chair Warsh says FOMC can't affect individual prices Fed chair Kevin Warsh acknowledged that while the FOMC may have voted to raise rates, that decision doesn't affect the lack of safe passage in the Strait of Hormuz, the primary pressure point keeping oil prices above $100 per barrel.

"We cannot affect any individual price, whether it be oil prices, whether it be foodstuffs at the grocery store," Warsh said, responding to a question on the Middle East dynamics. "But what we can do and will do is ensure that any change in relative prices don't broaden out, don't have second and third order effects in the economy. That's what we're tasked to do, and that's what we will do.

" Wed, September 16, 2026 at 6:38 PM UTC Jake Conley Warsh confirms he didn't participate in FOMC's Summary of Economic Projections Federal Reserve Chairman Kevin Warsh confirmed he did not submit his own views as part of the FOMC's Summary of Economic Projections, which includes the so-called dot plot that lays out the FOMC members' outlook on where monetary policy should be. "This afternoon, you also received the summary of economic projections — it reflects the views of my colleagues on the committee," Warsh said. "But as in June, I've not offered a projection of my own.

But like in June, I said I would faithfully discharge the summary of their projections. " Wed, September 16, 2026 at 6:36 PM UTC Grace O'Donnell Watch Kevin Warsh's speech live Federal Reserve Chairman Kevin Warsh began speaking at a press conference following the decision to rate interest rates by 25 basis points. "We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed," Warsh said in his opening remarks.

"Today, the FOMC decided that this standard has not been satisfied. " Watch the press conference live below or on YouTube. Wed, September 16, 2026 at 6:35 PM UTC Jake Conley Kevin Warsh opens his comments with focus on inflation Federal Reserve Chairman Kevin Warsh opened his press conference comments on Wednesday with a focus on inflation, citing strength elsewhere while price increases continue to run above target levels.

"Productivity growth is strong and capital investment is robust, job gains have kept pace with the workforce, and the unemployment rate has changed little," Warsh said. "But inflation remains elevated. Today's policy action will support a timelier return to the committee's 2% goal.

" "Our predominant focus is on the price stability side of our mandate," the chair added. "The plain fact is that inflation is too high and has been for too long. " Part of the drive for a rate hike today have been recent consumer and producer price data showing inflation continuing to run hot, a dynamic Warsh noted in his comments.

"This summer's inflation readings do not tell me that underlying trends have meaningfully improved. " Wed, September 16, 2026 at 6:34 PM UTC Grace O'Donnell What the Fed's rate hike means for borrowers Schwab Center for Financial Research head of fixed income research and strategy Collin Martin explained the implications of the Fed's policy moves on everyday Americans with retirement accounts and mortgages. "If you're a borrower, it's not great," Martin said.

"Home equity lines of credit, credit card rates, auto loans, they tend to be short term, so not necessarily a good thing," he said. "Mortgage rates, the trend has not been good. " He noted that the Fed retained its credibility and "did the right thing," which could cause long-term yields to fall a bit, which in the long run, could be good for borrowers.

He also emphasized that higher rates may be good for investors focused on fixed-income. Read more here. Wed, September 16, 2026 at 6:25 PM UTC Grace O'Donnell Will Warsh continue hawkish rhetoric or remain cryptic?

One thing Fed watchers will be closely listening to when Fed Chairman Kevin Warsh takes the podium today is whether he continues the hawkish rhetoric on inflation that the markets gleaned from his Jackson Hole speech. "You don't want the Fed Chair Warsh that we had at the first two press conferences," EY-Parthenon chief economist Greg Daco told Yahoo Finance. "The risk," Daco explained, "is if you have a cryptic message from the leadership, you don't really know what the committee is thinking and why the committee is deciding to tighten monetary policy at this stage, and where it sees monetary policy headed over the course of the next few months.

Right now, we have a dot plot, which has become a central bone of focus. That's exactly the opposite of what Fed Chair Warsh wanted. " "We may hear the word task force a few times once again if he wants to deflect," JPMorgan Asset Management Global Market Strategist Jordan Jackson added.

Wed, September 16, 2026 at 6:19 PM UTC Jake Conley Equities gain and Treasury yields fall after Fed raises rates US equities largely accelerated while Treasury yields fell in the minutes after the FOMC voted to issue a 25-basis point rate hike, bringing the target rate to a range of 3. 75% to 4%. In the equity market, the S&P 500 ( ^GSPC ) and tech-heavy Nasdaq Composite ( ^IXIC ) rose by 0.

3% and 0. 7%, respectively, while the Dow Jones Industrial Average ( ^DJI ) held largely flat. In fixed income, Treasury yields fell across the board, with the most dramatic move at the long end of the curve.

Yields on two-year notes fell by roughly 1 basis point, while those on longer-dated ten-year and 30-year bonds fell by 4 bps and 5 bps, respectively. Wed, September 16, 2026 at 6:11 PM UTC Grace O'Donnell Here are the changes to the FOMC's policy statement Here are the changes to the Federal Open Market Committee's policy statement, compared to its July statement. Additions are in bold; deletions are struck through.

The Committee decided to maintain the target range for the federal funds rate at 3-1/2 to 3-3/4 percent 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.

despite elevated uncertainty that owes, in part, to the conflict in the Middle East While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment are strong is robust . Job gains have kept pace with the workforce, and the unemployment rate has changed little.

Inflation remains elevated relative . Today's policy action will support a timelier return to the Committee's 2 percent goal, in part reflecting supply shocks that have driven price increases in certain sectors, including energy . The Committee will deliver price stability.

Voting against the monetary policy action were Beth M. Hammack, Neel Kashkari, and Lorie K. Logan, who preferred to raise the target range for the federal funds rate by 1/4 percentage point at this meeting.

Wed, September 16, 2026 at 6:11 PM UTC Jake Conley FOMC forecasts imply one more hike to come in 2026 Most FOMC members see the need for one more 25 basis point rate hike to come this year, as 12 out of 18 members that submitted projections peg their view of appropriate monetary policy in 2026 at an average of 4. 125%. Four members see 50 more basis points' worth of rate hikes in 2026 as appropriate, while only two members see no more hikes this year — suggesting that the new effective target rate of 3.

75% to 4% is adequate. The Summary of Economic Projections, known as the "dot plot," does not label projections with the names of the Federal Reserve members who made them.