Federal Reserve hikes key rate for first time in three years, defying Trump demands for cut

The Hindu – International

You are logged in

Loading…

You don’t have any Active Subscription.

Subscribed with another email? Logout and Login with that one.

Your active subscription(s)

Account subscription benefits alongside Premium Stories, Editorials,
Opinions and more. Unlock these with Subscription

Products you’ve access to

Additional Subscription Benefits

Account Settings

Need help with your subscription?

September 16, 2026 e-Paper

The View From India
Looking at World Affairs from the Indian perspective.

First Day First Show
News and reviews from the world of cinema and streaming.

Today's Cache
Your download of the top 5 technology stories of the day.

Science For All
The weekly newsletter from science writers takes the jargon out of science and puts the fun in!

Data Point
Decoding the headlines with facts, figures, and numbers

THEdge
At the cutting edge of education and careers

Health Matters
Ramya Kannan writes to you on getting to good health, and staying there

Gender Agenda
Stories from beyond the binary.

The Hindu On Books
Books of the week, reviews, excerpts, new titles and features.

September 16, 2026 e-Paper

Published – September 17, 2026 12:18 am IST – Washington

Federal Reserve Chairperson Kevin Warsh holds a press conference following a two-day meeting of the Federal Open Market Committee (FOMC) at the Federal Reserve in Washington, D.C., U.S. on September 16, 2026.
| Photo Credit: Reuters

The Federal Reserve raised its benchmark interest rate on Wednesday (September 16, 2026) for the first time since 2023 in an effort to quell stubbornly-high inflation, a move that could spur a sharp response from the White House.

The quarter-point increase lifts the Fed's key rate to about 3.9% and, over time, could result in higher borrowing costs for mortgages, auto loans, and credit cards. In a set of quarterly projections, the Fed also signalled that its rate-setting committee expects to hike rates a second time later this year to 4.1%.

“Today's policy action will support a timelier return” to the central bank's 2% inflation goal, the Fed said in a statement.

The move comes as Americans are already struggling with high costs for groceries, gas, and housing. Affordability has taken on a leading role in the upcoming midterm elections, just seven weeks away.

The rate hike is a surprising turnaround for Fed Chair Kevin Warsh, who was appointed by President Donald Trump and took over the top job in May. Warsh often suggested last year when under consideration by Trump that the Fed could reduce its key rate, echoing the President's call for lower borrowing costs.

Published – September 17, 2026 12:18 am IST

World

/

USA

/

Donald Trump

Terms & conditions | Institutional Subscriber

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.

Fonte: The Hindu – International