Where the Rate Is
On September 16, 2026 the Federal Open Market Committee voted 12–0 to raise the target range by a quarter point, to 3.75–4.00%, its first increase since July 2023. The effective rate is —. The statement said inflation “remains elevated” and that the move would support a “timelier return” to the 2% goal. It was the first hike under Chair Kevin Warsh, who took office in May.
The Policy Rate, the 2-Year and Inflation
Five years of the effective fed funds rate, the 2-year Treasury and core PCE inflation.
What the Fed Projects
In September, officials’ median projection (the “dot plot”) put the rate at 4.1% at the end of 2026, implying one more quarter-point increase, and 4.1% at the end of 2027 before easing to 3.9% in 2028. Their estimate of the long-run neutral rate rose to 3.2%. Sixteen of eighteen officials expected at least one more hike this year.
What Markets Are Pricing
Why It Matters for Investors
Higher policy rates raise the discount rate used to value every stock and bond. They hit long-duration assets hardest: growth stocks, long bonds and utilities. That is a large part of why the cash-flow values in the holdings reports come in below today’s prices, since the 10-year Treasury is —. The next decision is due on October 27–28.
Takeaway. The Fed has turned from pausing to tightening. Until core inflation clearly falls back toward 2%, the burden of proof is on rate cuts, not hikes.
Figures in copper come straight from FRED and update every weekday; other figures are as of October 21, 2026. For education only, not investment advice.