Fed resumes rate hikes, ending longest pause since 2008
Macro & Markets ·
The Federal Reserve raised interest rates by 25 basis points on September 16, 2026, its first increase since July 2023, in a unanimous 12-0 vote.
The move ends what had been the central bank's longest hold on rates since 2008, according to a post detailing the decision. The Fed said the hike will support a "timelier" return to its 2% inflation target, and its statement reiterated that "the Committee will deliver price stability." The median forecast among Fed officials points to one additional 25 basis point hike in 2026, suggesting the tightening cycle is not yet over.
In its accompanying assessment of the labor market, the Fed described job gains as strong and said the unemployment rate has "changed little," language that signals policymakers see little near-term risk of the hikes causing significant labor-market damage. The unanimous vote indicates full consensus on the committee for resuming increases rather than a split decision, which could reduce the chance of near-term reversal.
The decision was corroborated across multiple accounts describing the same 25 basis point increase and the 12-0 vote tally, with some emphasizing the multi-year gap since the last hike and others framing it as the end of an extended pause. The repeated detail across sources — the size of the hike, the unanimous vote, and the 2% inflation reference — points to a consistent read of the Fed's communication rather than conflicting interpretations.
What remains unresolved is how markets and borrowing costs will adjust to a renewed hiking cycle after more than a year without one, and whether the projected second hike in 2026 will materialize as forecast or be revised as new inflation and employment data arrive. The Fed's own language pointing to further tightening, described as "higher for longer" in the reporting, suggests policymakers are prepared to extend the cycle if price pressures persist, though the committee gave no explicit timeline beyond the median dot for one more move this year.