September 2026 Fed Meeting: The Fed Raises Rates to 3.75-4.00%, the Dot Plot Adds One More, and Stocks Turn Lower

TL;DR

• The fed funds target range is now 3.75-4.00%. The FOMC raises it a quarter point at 2:00pm ET on Wednesday, September 16, 2026, the first increase since 2023, on a 12-0 vote.
• The dot plot adds one more. The median projection puts the funds rate at 4.1% at the end of 2026, a quarter point above the new range, and at 4.1% again at the end of 2027, which removes the cut June had pencilled in for next year.
• Stocks close lower. The S&P 500 is up about 0.4% right after the statement, gives it all back during Chair Warsh's press conference, and closes down 0.45% at 7,551.81. The Dow loses 1.21%, the Nasdaq finishes flat, and the 10-year Treasury yield holds above 5%.
• What comes next, in order: the September jobs report on October 2, the minutes of this meeting on October 7, September CPI on October 14, and the next decision on October 28. No dot plot until December.

What Did the Fed Decide on September 16?

A quarter-point hike to 3.75-4.00%, with nobody voting against it. The committee "decided to raise the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent, in support of the Federal Reserve's dual mandate", per the statement. The vote is 12-0. In July the same move failed 9-3, with Hammack, Kashkari and Logan dissenting in favour of it; in September they get it without a single vote the other way. The statement also keeps the balance-sheet line unchanged: the committee "is continuing its policy of maintaining ample reserves in the banking system."

Figure	September 16, 2026
Decision	Raised a quarter point to 3.75-4.00%
Vote	12-0, no dissents
2026 median fed funds (June: 3.8%)	4.1%
2027 median fed funds (June: 3.6%)	4.1%
S&P 500 close	7,551.81, down 0.45%
Dow close	51,461.90, down 1.21%
Nasdaq Composite close	25,978.42, down 0.01%

It is the first increase in the target range since 2023. Every 2026 decision before this one held at 3.50-3.75%, the range the December 2025 cut left behind, and the Fed meeting calendar carries the full record with the vote on each row.

What the Dot Plot Shows

One more quarter point this year, and no cut next year. The Summary of Economic Projections publishes with the statement, and every line on it moves the same direction, per the Fed's projections table.

Median projection	June	September
Fed funds, end-2026	3.8%	4.1%
Fed funds, end-2027	3.6%	4.1%
Fed funds, end-2028	3.4%	3.9%
PCE inflation, 2026	3.6%	3.7%
Core PCE inflation, 2026	3.3%	3.4%
Unemployment, 2026	4.3%	4.1%
Real GDP growth, 2026	2.2%	2.3%

The arithmetic on the 2026 line is simple. The new range's midpoint is 3.875%, so a 4.1% median is one more 25 basis point hike before the end of the year, at either the October 28 or the December 9 meeting. The 2027 line moves further than the 2026 one: in June the committee had itself cutting next year, to 3.6% from 3.8%, and September puts it at 4.1% in both years, which removes that cut and adds a hike in front of it. Set that beside an unemployment median falling to 4.1% from 4.3% and the forecast is for higher prices and a tighter labour market than the same people expected three months ago.

One detail on the dot plotThe dot plot is a chart the Fed publishes four times a year showing where each of its 19 policymakers expects interest rates to be at the end of this year and the next few. Each dot is one anonymous official. Markets watch the median dot, because it shows whether the committee as a whole still expects to raise or cut. itself: it carries 18 dots rather than 19. Warsh does not submit his own for a second straight meeting.

What Warsh Says at 2:30pm

The press conference walks back the morning's optimism, and the market hears it. "This summer's inflation readings do not tell me that underlying trends have meaningfully improved," Warsh tells reporters, which is close to the line he used at Jackson Hole on August 28. Asked about pressure from the Trump administration to hold rates, he says "we stay in our lane."

My read: the hike itself was priced above 92% by Tuesday, so the statement could not move much. The press conference could, and it did, in the hawkish direction. A chair who declines to say inflation has improved, three weeks after a hot PPI and a core CPI beat, is telling the market the 4.1% median is a plan and not a placeholder.

What Moves Markets on the Day

Wednesday, September 16, in order.

8:30am ET: August retail sales come in hot. Sales rise 1.2% against a consensus near 0.8%, with July revised to -0.5%, and the control group excluding autos and gas matches the headline at +1.2%, per Census. A print that strong keeps the resilient-economy case behind the expected hike intact. All three indexes are higher through the morning and into the early afternoon.

2:00pm ET: the statement lands and stocks hold their gain. The S&P 500 is up roughly 0.4% in the minutes after the decision. A hike this well telegraphed is not a surprise, and the first reaction treats it that way.

2:30pm ET: the press conference turns the day. During Warsh's remarks the S&P 500 gives back more than 80 basis points and keeps falling into the close. Long-dated yields rise with it: the 10-year Treasury yield, which touched 5.02% on Tuesday, its highest since 2007, holds above 5% through the afternoon.

4:00pm ET: the close. The S&P 500 finishes at 7,551.81, down 0.45% (33.92 points) from Tuesday's 7,585.73. The Dow falls 1.21% (631.21 points) to 51,461.90, and the Nasdaq Composite ends effectively flat, down 0.01% at 25,978.42, per Yahoo Finance and CNBC. The heatmap shows which groups carried the index lower, and the hour-by-hour timetable has the shape of the day slot by slot.

How the Market Got Here

The odds moved nine times on nine inputs, and the last four all went the hawkish way. Just after the July 28-29 hold, where three officials dissented in favour of a hike, a September hike was priced near 58%. A soft run of July data (payrolls at -23,000 in the first release, CPI at 3.4%, retail sales down 0.6%) took it down to about a third by mid-August. Then, in order:

Point	September hike odds
Mid-August, after the soft July data	~35%
Aug 28, after Warsh at Jackson Hole	57%
Aug 31 to Sep 1, no new data	60-66%
Sep 3, after Waller's pushback	~50-55%
Sep 4, after August payrolls at +162,000	~60%
Sep 10, after a hot August PPI	~70-73%
Sep 11, after August CPI's core beat	~85-86%
Sep 15, ahead of the vote	more than 92%

Two things stand out in hindsight. Warsh moved the market on words at Jackson Hole, and Governor Waller pulled about half of it back on words on September 3, saying he would support a hold "if incoming data over the next two weeks continues to show disinflation." The data then did the opposite: payrolls beat every estimate, PPI printed 5.4% on the year against roughly 5.3% expected, and core CPI came in a tenth hot. By the time the 10-year yield hit a 19-year high on Tuesday the vote was a formality, and the 12-0 result says the committee saw it the same way.

What Comes Next

The next decision is October 28, and the committee's own median says one more hike arrives at that meeting or the one after. What lands before it, in order:

• September 30: August PCE inflation and the third estimate of Q2 GDP, 8:30am ET.
• October 2: the September jobs report, 8:30am ET.
• October 7: the minutes of this meeting, 2:00pm ET. With a unanimous vote, the read is how many participants wanted more than one further hike.
• October 14: September CPI, 8:30am ET.
• October 15: September PPI and retail sales, 8:30am ET.
• October 27-28: the next FOMC meeting. Statement at 2:00pm ET on the 28th, no dot plot.
• December 8-9: the last meeting of 2026, with the next dot plot.

The live countdown and every date through 2027 are on the Fed meeting calendar, and today's timetable rebuilds itself each morning from the same data. For the rest of this week, Lennar after Wednesday's close and quadruple witching on Friday, see the week-ahead hub.

The Board

Six events on the runway, and the vote goes the way the last four of them point: a quarter-point hike, with another in the forecast.

The One-Line Read

The Fed raises rates a quarter point to 3.75-4.00% on a 12-0 vote, its first hike since 2023, the median dot shows one more before year end, and stocks close lower after Warsh's press conference.