The Fed decides today on its first rate hike in three years

The Fed decides today on its first rate hike in three years

The Federal Reserve of the United States decides its interest rate policy today. The Federal Reserve is the central bank of that country. Its job is to protect the value of money.

A first rate hike in three years is expected. The decision will be announced later today. Everything points to a big change.

What the interest rate is

The interest rate is the price of money. When the rate goes up, borrowing costs more. Then people spend less and prices fall.

The expected hike is a quarter of a point. That is 25 basis points. Basis points are the technical way to measure small rate changes.

The range would move from 3.50% to 3.75% today. With the hike it would be 3.75% to 4.00%.

Why the Fed would raise rates

The main reason is inflation. Inflation is when prices keep rising. In the United States inflation is not slowing down.

The producer price index rose 5.4% in one year. The month before it had been 4.7%. That index measures what things cost for companies.

The chair of the Fed is Kevin Warsh. He has held the job for only four months.

In August there was a meeting in Jackson Hole. There Warsh promised to take the steps needed to lower inflation. He put his credibility on the line.

The dilemma of the Fed

Analysts describe a dilemma. If it does not raise rates, it disappoints the market. If it does, it angers President Donald Trump.

Trump pushes in public for lower rates. He said before the meeting that the United States should have lower rates.

How the market looks

The interest on the 10-year bond is below 5%. That bond is a loan to the government for ten years.

Stocks rose in the morning before. Bitcoin is around 75,000 to 76,000 dollars.

There is no official announcement yet. Today's decision is still unknown.

Sources: El País (Spain), Associated Press, Bloomberg and CNBC (United States), Valor Econômico (Brazil). September 16, 2026.