Quarterly Economic Update

Meeting Date: September 15-16, 2026

Federal Open Market Committee (FOMC) Meeting Results

FOMC meeting highlights:

• The Fed raised rates to the 3.75% - 4.0% range today. This is the first rate hike in 3 years. This meeting’s vote was unanimous. The formal release statement was extremely short and to the point. The FOMC promises price stability.

Economic highlights:  

• 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% goal.
• The Committee will deliver price stability.

Announcements:  

The fed funds range increased to 3.75% - 4.0% range.

• The Committee decided to raise the target range for the federal funds rate to 3.75% – 4.0%, in support of the Federal Reserve's dual mandate.
• The Committee reaffirmed its policy of maintaining ample reserves in the banking system.

Implementation Note:

Decisions Regarding Monetary Policy Implementation

The Board of Governors of the Federal Reserve System voted unanimously to raise the interest rate paid on reserve balances to 3.90%, effective September 17, 2026.

As part of its policy decision, the Federal Open Market Committee voted to direct the Open Market Desk at the Federal Reserve Bank of New York, until instructed otherwise, to execute transactions in the System Open Market Account in accordance with the following domestic policy directive:

Effective September 17, 2026, the Federal Open Market Committee directs the Desk to:

• Undertake open market operations as necessary to maintain the federal funds rate in a target range of 3.75% - 4.0%.
• Conduct standing overnight repurchase agreement operations at a rate of 4.0%.
• Conduct standing overnight reverse repurchase agreement operations at an offering rate of 3.75%and with a per-counterparty limit of $160 billion per day.
• When appropriate, increase the System Open Market Account holdings of securities through purchases of Treasury bills and, if needed, other Treasury securities with remaining maturities of 3 years or less to maintain an ample level of reserves.
• Roll over at auction all principal payments from the Federal Reserve's holdings of Treasury securities. Reinvest all principal payments from the Federal Reserve's holdings of agency securities into Treasury bills.

In a related action, the Board of Governors of the Federal Reserve System voted unanimously to approve a 0.25% point increase in the primary credit rate to 4.0%, effective September 17, 2026. In taking this action, the Board approved requests to establish that rate submitted by the Board of Directors of the Federal Reserve Banks of Cleveland, Richmond, Atlanta, Chicago, Minneapolis, Kansas City, and Dallas.

The FOMC announced a new dot plot of future rate changes.	The FOMC announced its new economic projections.

Voting results:  

The vote was 12-0, unanimous.

Next meeting:  

October 27-28, 2026

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