Federal Reserve Expected to Raise Interest Rates Wednesday
The Federal Reserve is widely expected to raise the benchmark interest rate by 0.25 percentage points at its September 16 meeting, marking a shift from earlier expectations and signaling tighter monetary policy ahead for borrowers, including newcomers seeking mortgages and credit.
The next Federal Reserve interest rate decision is on Wednesday 16 September 2026, at the end of a two-day meeting that also brings updated projections. J.P. Morgan Wealth Management strategists now expect the Federal Reserve (Fed) to raise interest rates by 0.25 percentage points at its September meeting. This marks a shift from our strategists' prior base case of no rate changes in 2026.
Why the Shift?
Two drivers lowered the bar for a September hike: continued supply-chain shocks tied to the ongoing Iran conflict that are keeping energy costs elevated and increased investor doubt about the Fed's willingness to keep inflation contained after it left rates unchanged in July. While US headline CPI eased to 3.4% in the year to July 2026, from 3.5% in June, with prices up just 0.1% on the month. Core CPI, which strips out food and energy, slowed to 2.5% from 2.6%, the persistence of energy-driven inflation and broader concerns about the Fed's credibility pushed officials toward action.
Market Expectations Ahead
As of market close on September 11, 2026, futures markets are pricing a gradual increase to about 4.1% by December and roughly 4.6% by September 2027. The Federal Reserve held the federal funds target range at 3.50%–3.75% on 29 July 2026, where it has stood since December 2025.
What This Means for You
If you are planning to buy a home, take out a mortgage, or use credit in the United States, this rate increase will make borrowing more expensive. Higher federal rates typically drive up mortgage rates, car loans, credit card interest, and other consumer credit. Newcomers and expats who are in the process of purchasing a home or car should be aware that conditions are tightening; locking in a rate sooner may be more advantageous than waiting. Conversely, if you hold savings in US bank accounts or money market funds, higher interest rates mean better returns on your deposits over time.
Sources
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