The Federal Reserve raised its benchmark policy rate by 25 basis points at the September Federal Open Market Committee meeting, lifting the target range to 3.75–4.00 percent. The decision was approved unanimously by a 12–0 vote.
In its statement, the FOMC said economic activity continues to expand at a solid pace, but noted that uncertainty remains high partly due to geopolitical developments—a shift from the previous statement’s direct reference to the Middle East conflict. The central bank added that employment growth was in line with labor market growth and the unemployment rate had changed very little, while inflation remained at high levels.
Notably, the Fed removed language stating that price increases were due to supply shocks in some sectors. Instead, the committee said: “Today’s policy action will support inflation returning to the Committee’s 2 percent target more timely.” It also reinforced its price stability commitment, stating, “The Committee will ensure price stability.”
Markets now turn to Federal Reserve Chair Kevin Warsh’s press conference, scheduled for 9:30 PM. US inflation has remained above the Fed’s 2 percent target for more than five years, and the Middle East war’s upward pressure on prices has intensified inflation concerns. Warsh said at the Jackson Hole Symposium in August that “we have work to do” on inflation and stressed he would avoid premature guidance on rates.
Beyond the rate decision, the Fed’s Summary of Economic Projections and dot plot will signal the likely path of monetary policy. President Donald Trump continues to pressure the central bank to cut rates, writing on Truth Social on September 4: “Lower interest rates, or I will stop trading with countries with whom we have a trade deficit.” Bitcoin’s initial reaction was closely watched, though specific price movement details were not provided in the initial report.
