Fed Raises Rates 25 Basis Points on September 17, 2026

1. FED HIKES RATES FOR FIRST TIME SINCE 2023
The Federal Reserve raised the federal funds rate by 25 basis points to a target range of 3.75%-4.00%, the first increase since July 2023 and the first under Chair Kevin Warsh. The FOMC decision was unanimous. The move ends the long policy pause and signals a renewed tightening stance.

2. FED SIGNALS ANOTHER POSSIBLE HIKE IN 2026
The median dot plot shows one more 25-basis-point increase later in 2026. Twelve of 18 officials projected one additional hike, four projected two more, and two projected none. Chair Warsh said inflation remains too high, summer data showed no clear improvement, and the FOMC is not convinced inflation is moving toward the 2% target. The Fed raised its 2026 PCE inflation forecast to 3.7% and sees inflation returning to 2% only by 2029; it lifted GDP growth to 2.3% and cut year-end unemployment to 4.1%.

3. WALL STREET DROPS AFTER HAWKISH FED DECISION
The Dow Jones Industrial Average fell 631.21 points, or 1.21%, to 51,461.90, its lowest close since mid-June. The S&P 500 lost 0.45% to 7,551.81, while the Nasdaq Composite slipped 0.01% to 25,978.42. The KBW bank index dropped 2.9%, its steepest fall since February. The rate-sensitive 2-year Treasury yield rose 6.5 basis points to 4.725%, the highest since 2024, and the 10-year yield moved back above 5%; the dollar index strengthened for a third straight session to around 100.34.

4. OIL PULLS BACK SHARPLY AFTER RECENT RALLY
WTI October futures settled down 3.21% at 102.43 USD per barrel; Brent November futures fell 2.69% to 105.83 USD per barrel. The reversal came after a strong run-up, with some sources indicating Saudi Arabia sought to restore about half the capacity of its East-West pipeline within days following drone strikes. China's night-session crude oil main contract also dropped 4.01% to 804.8 yuan per barrel.

5. GOLD AND SILVER RETREAT AS DOLLAR STRENGTHENS
COMEX December gold settled down 0.7% at 4,302.5 USD per ounce, while COMEX silver fell 0.68%-0.75% to 63.40-63.42 USD per ounce. Spot gold declined 0.7% to 4,263.94 USD per ounce and spot silver lost 1.08% to 62.96 USD per ounce. A stronger dollar after the Fed decision dampened demand for non-yielding assets.

6. TRUMP CALLS FOR MUCH LOWER INTEREST RATES
US President Donald Trump posted on social media that interest rates should be 1% or lower and called for fast rate cuts. The statement contrasted with the Federal Reserve's newly announced tightening path. After the hike, major US banks including JPMorgan raised prime lending rates to 7% effective Thursday; central banks in Saudi Arabia, the UAE, Qatar, Bahrain and Oman also increased rates by 25 basis points, while Brazil cut its benchmark rate by 25 basis points to 13.75%.

7. US RETAIL SALES COME IN ABOVE EXPECTATIONS
US August retail sales rose 1.2% month-over-month, well above forecasts, supported by vehicle purchases and back-to-school spending. The stronger consumer data reinforces the case for the Fed to keep policy tight in the near term.

8. TRADE PROBE AND CHIP-RELATED FUNDING IN FOCUS
The US International Trade Commission voted to open an investigation into certain electronic devices containing audio technology, naming Apple, Samsung and Google as respondents. Separately, banks provided 22 billion USD in chip-related loans to Blackstone and Alphabet; Nvidia announced an alliance with Emerald AI and Google to advance flexible AI data centers; and OpenAI integrated its ad platform with HubSpot and Shopify.

What to watch today: Reactions from Asian and European markets after the Fed rate hike, along with incoming US economic data that could shape expectations for a possible October move.

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