Fed Ends Three-Year Hold With Quarter-Point Hike as Stocks Gain Almost 1%
Wall Street was set to open almost 1% higher on Thursday, September 17, 2026, after the Federal Reserve raised interest rates for the first time in over three years. Reuters
The Federal Open Market Committee, the Fed's rate-setting group, raised its target range for the federal funds rate, the overnight rate banks charge each other, by a quarter point (25 basis points) to 3-3/4 to 4 percent. Federal Reserve The decision followed its September 15-16, 2026 meeting, with the statement released September 16, 2026 at 2:00 p.m. The hike on the Wednesday before September 17 ended a three-year hold.
The move was carried out through administered rates. The Board of Governors voted unanimously to raise the interest rate paid on reserve balances (IORB), the rate the Fed pays banks for cash parked at the central bank, to 3.90 percent. Federal Reserve That vote was unanimous. At 3.90 percent, IORB sits inside the new target range, preserving the corridor structure for overnight funding.
Stocks edged up early on September 17 as investors digested the decision. Reuters Easing oil prices, falling U.S. Treasury yields (the return on government bonds) and steady labor data came with the bounce. Reuters Futures pointed to a firm open. Cash trading carried that tone into the morning.
Gains were uneven. Intel Corp (INTC) traded at $109.57, up $8.52 or 8.43%, as of 11:16 AM EDT on September 17, 2026, after a prior close of $101.05. Bloomberg That move was well ahead of the broad index move implied by futures.
The broader context here is positioning rather than simple arithmetic. A quarter-point change to the funds range and the matching 10 basis-point shift in IORB do not reprice credit on their own. They clear away worst-case uncertainty about the path. Desk hedging around Fed dates tends to shrink once the statement and rate votes are out, and futures often firm as those hedges unwind, even when policy just got tighter.
In my view, the mix of the rally matters more than the headline index level. Falling Treasury yields with a hike point to what traders call bull-flattening, with short-term rates held by the new 3-3/4 to 4 percent range and IORB at 3.90 percent while longer-term bonds find buyers. Easing oil and steady labor ease fears of weak growth with high inflation in stock valuations. That mix often brings a relief bid first, led by economically sensitive stocks and fast-moving tech, as seen in Intel's outsized gain against the almost 1% index signal.
Looking at what this means for funding, the unanimous IORB vote is the operational anchor. Reserve balances, money funds and repo should drift toward the new administered level. For bank profit margins and deposit competition, the pass-through to savers and borrowers will be gradual. For stock valuations, the test is whether Treasury yields keep falling or move back higher on tighter policy.
