Fed Lifts Funds Rate to 3.75%-4%, Sets IORB at 3.90%

The Federal Open Market Committee raised the target range for the federal funds rate by 25 basis points to 3-3/4 to 4 percent on September 16, 2026, according to its post-meeting statement Federal Reserve.

The Board of Governors voted unanimously the same day to raise the interest rate paid on reserve balances to 3.90 percent Federal Reserve. The vote was unanimous. The 10-basis-point spread to the top of the target range preserves the administered-rate corridor structure.

The decision concluded a two-day meeting held September 15-16, 2026. The Committee released its statement at 2:00 p.m. on September 16, followed by a scheduled press conference at 2:30 p.m. that day. Participants submitted economic projections in conjunction with the meeting Federal Reserve.

The increase was the Federal Reserve's first interest-rate hike since 2023 CNBC. Policymakers projected one more interest-rate hike in 2026 after the September move, a signal reported both at the time of the meeting and in subsequent coverage Reuters.

That forward signal was quickly tested. After a weaker-than-expected September jobs report, traders viewed an October 2026 rate hike as extremely unlikely CNBC. The pricing shift set up a familiar tension between the Committee's median projection and fed funds futures-implied expectations.

The procedural calendar is standard. The FOMC holds eight regularly scheduled meetings each year, plus other meetings as needed. Minutes of regularly scheduled meetings are released three weeks after the policy decision. Committee membership changes at the first regularly scheduled meeting of the year. Each meeting date is tentative until confirmed at the meeting immediately preceding it. The calendars, statements and minutes page was last updated on September 16, 2026. A two-day meeting is scheduled for January 25-26, 2028.

The broader context here is sequencing. A September hike paired with a projection for one additional move in 2026 communicates a short, finite tightening extension rather than a renewed cycle. For desk strategy, the distinction matters for term funding, OIS forwards, and reserve-demand assumptions into year-end.

In my view, the variables to watch are the interaction of the projection with incoming labor data. The September projections were conditioned on information available September 15-16. The subsequent soft payroll print did not change the Committee's formal stance, but it changed market-implied probability for October. That divergence leaves the November-December meetings, and any intermeeting communication, as the mechanism for reconciliation.

Looking at what this means for implementation, the unanimous IORB adjustment keeps overnight rates contained within the new range without altering the corridor width. With reserves still abundant, IORB remains the primary marginal tool. Any deviation in effective fed funds or repo prints from the new range would be operational, not a policy signal, unless the Board adjusts administered rates again.