Update: The Federal Open Market Committee voted to raise the federal funds rate at its September 2026 meeting. It’s the first time the Fed has voted to raise rates since July 2023.
The current Fed rate is 3.75% to 4.00%. That’s according to the Federal Open Market Committee (FOMC), the monetary policymaking part of the Federal Reserve that holds eight regularly scheduled meetings a year to set the federal funds rate.
What is the Fed funds rate?
The federal funds rate, or Fed rate, is the interest rate that U.S. banks pay one another to borrow or loan money overnight. It also affects interest rates on everyday consumer products, such as credit cards or mortgages.
Since banks hold reserves to conduct everyday business such as having enough liquidity and clearing payments, banks that need more reserves often borrow money from other banks.
When is the next Fed meeting?
The Federal Open Market Committee's next meeting is Oct. 27-28, 2026. This is the next scheduled time that the FOMC could modify the federal funds rate.
Who sets the Federal funds rate?
The Federal Open Market Committee sets the federal funds rate. The FOMC sets the target rate range, and sets the Fed rate to be aligned with that target range.
Fed hikes interest rates at its September meeting
The Federal Reserve raised its benchmark interest rate by a quarter percentage point On Sept. 16, bringing the federal funds target range to 3.75%-4%.
It’s the first hike since 2023 and the first under recently-appointed Fed Chair Kevin Warsh, as inflation remains above the Fed’s 2% target.
The Fed’s move landed as gas prices continued to climb above $4 per gallon on average, amid continuing escalation of fighting in Iran and U.S. negotiations stalling out. Warsh said while the Fed can’t control individual prices such as gas or groceries, its decisions can prevent those price increases from spreading through the broader economy.
For consumers, higher rates generally mean borrowing gets more expensive, while savers may benefit from higher yields. Credit card, auto loan and other variable-rate debt can become costlier, while mortgage rates may also rise, making homebuying more expensive. Banks may offer higher rates on savings accounts and CDs.
Will the Fed raise rates again this year?
The question now is what comes next. Data reports will continue to guide the Federal Open Market Committee’s upcoming actions.
The dot plot, which reflects FOMC members’ expectations about the direction of the target federal funds rate, shows that the majority of members anticipate at least one more 25-basis-point increase this year.
What is the current Fed interest rate?
Right now, the Fed interest rate is 3.75% to 4.00%. The FOMC set the rate at its Sept. 15-16 meeting.
Here are the most recent Fed rates from regularly scheduled FOMC meetings:
FOMC meeting dates | Rate change | Fed rate (as a target range) |
|---|---|---|
Sept. 15-16, 2026. | Increase of 25 basis points (or 0.25 percentage point). | 3.75% to 4.00%. |
July 28-29, 2026. | None. | 3.50% to 3.75%. |
June 16-17, 2026. | None. | 3.50% to 3.75%. |
April 28-29, 2026. | None. | 3.50% to 3.75%. |
March 17-18, 2026. | None. | 3.50% to 3.75%. |
Jan. 27-28, 2026. | None. | 3.50% to 3.75%. |
+ Click to see 2025 Fed rates and rate decreases
FOMC meeting dates | Rate change | Fed rate (as a target range) |
|---|---|---|
Jan. 27-28, 2026. | None. | 3.50% to 3.75%. |
Dec. 9-10, 2025. | Decrease of 25 basis points (or 0.25 percentage point). | 3.50% to 3.75%. |
Oct. 28-29, 2025. | Decrease of 25 basis points (or 0.25 percentage point). | 3.75% to 4.00%. |
Sept. 16-17, 2025. | Decrease of 25 basis points (or 0.25 percentage point). | 4.00% to 4.25%. |
July 29-30, 2025. | None. | 4.25% to 4.50%. |
June 17-18, 2025. | None. | 4.25% to 4.50%. |
May 6-7, 2025. | None. | 4.25% to 4.50%. |
March 18-19, 2025. | None. | 4.25% to 4.50%. |
Jan. 28-29, 2025. | None. | 4.25% to 4.50%. |
+ Click to see 2024 Fed rates and rate decreases
FOMC meeting dates | Rate change | Fed rate (as a target range) |
|---|---|---|
Dec. 17-18, 2024. | Decrease of 25 basis points (or 0.25 percentage point). | 4.25% - 4.50%. |
Nov. 6-7, 2024. | Decrease of 25 basis points (or 0.25 percentage point). | 4.50% - 4.75%. |
Sept. 17-18, 2024. | Decrease of 50 basis points (or 0.50 percentage point). | 4.75% - 5.00%. |
July 30-31, 2024. | None. | 5.25% - 5.50%. |
June 11-12, 2024. | None. | 5.25% - 5.50%. |
April 30-May 1, 2024. | None. | 5.25% - 5.50%. |
March 19-20, 2024. | None. | 5.25% - 5.50%. |
Jan. 30-31, 2024. | None. | 5.25% - 5.50%. |
+ Click to see 2023 Fed rate increases
FOMC meeting dates | Rate change | Fed rate (as a target range) |
|---|---|---|
Dec. 12-13, 2023. | None. | 5.25% - 5.50%. |
Oct. 31-Nov. 1, 2023. | None. | 5.25% - 5.50%. |
Sept. 19-20, 2023. | None. | 5.25% - 5.50%. |
July 25-26, 2023. | Increase of 25 basis points (or 0.25 percentage point). | 5.25% - 5.50%. |
June 13-14, 2023. | None. | 5.00% - 5.25%. |
May 2-3, 2023. | Increase of 25 basis points (or 0.25 percentage point). | 5.00% - 5.25%. |
March 21-22, 2023. | Increase of 25 basis points (or 0.25 percentage point). | 4.75% - 5.00%. |
Jan. 31-Feb 1, 2023. | Increase of 25 basis points (or 0.25 percentage point). | 4.50% - 4.75%. |
+ Click to see 2022 Fed rate increases
FOMC meeting dates | Rate change | Fed rate (as a target range) |
|---|---|---|
Dec. 13-14, 2022. | Increase of 50 basis points (or 0.50 percentage point). | 4.25% - 4.50%. |
Nov. 1-2, 2022. | Increase of 75 basis points (or 0.75 percentage point). | 3.75% - 4.00%. |
Sept. 20-21, 2022. | Increase of 75 basis points (or 0.75 percentage point). | 3.00% - 3.25%. |
July 26-27, 2022. | Increase of 75 basis points (or 0.75 percentage point). | 2.25% - 2.50%. |
June 14-15, 2022. | Increase of 75 basis points (or 0.75 percentage point). | 1.50% - 1.75%. |
May 3-4, 2022. | Increase of 50 basis points (or 0.50 percentage point). | 0.75% - 1%. |
March 15-16, 2022. | Increase of 25 basis points (or 0.25 percentage point). | 0.25% - 0.50%. |
After sitting at 0% for two years during the coronavirus pandemic, the rate steadily climbed starting in March 2022, as the Federal Reserve aimed to combat inflation. But the climb stopped a year and a half later. The Fed then paused rates eight times between July 2023 and July 2024. In 2024, the Federal Reserve decreased the federal funds rate three times. The Fed held steady in 2025 until its meeting in September, when it cut the rate by 25 basis points. It lowered the rate again in October and December. In the first five FOMC meetings of 2026, the Fed decided to hold the rate steady, but in September, the Fed increased the rate for the first time since July 2023.
Will rates be cut in 2026?
At the FOMC’s December 2025 meeting, a survey of FOMC members known as the "dot plot" showed that the median prediction is for an additional 25 basis points cut by the end of 2026. The anonymous predictions weren’t unanimous, though.
That cut did not come during the first five meetings this year, held in January, March, April, June and July, and in fact, the Fed decided to raise the federal funds rate at its Sept. 15–16 meeting.
What happens when the Fed lowers interest rates?
When the Federal Reserve lowers the federal funds rate, banks pay less to borrow money from one another. Banks, in turn, lower interest rates on loans (including mortgages) and credit cards, lowering the cost of borrowing money to buy cars, homes and other big purchases. The stock market is likely to be affected by a lower Fed rate hike, with stock prices growing. All of these factors are intended to induce economic growth. With borrowing costs lowered, consumers have incentive to spend and invest more.
Unfortunately, lower interest rates at banks due to a lower Fed rate means that deposit account interest rates will fall, too. So annual percentage yields on deposit products such as CDs, savings and interest-bearing checking accounts will decline as well.
The Federal Reserve paused on changes to the federal funds rate starting in July 2023, keeping rates steady for more than a year. As such, bank interest rates generally remained flat starting in September 2023 until 2024 when interest rates began to fall. In anticipation of a drop, banks started lowering rates on deposit accounts such as savings and certificates of deposit. The Federal Reserve dropped its interest rate three times in 2024: by 50 basis points in September to 4.75% to 5.00%, then by 25 basis points in November to 4.50% to 4.75% and by 25 basis points again in December to 4.25% to 4.50%. After holding rates steady for most of 2025, the Fed cut them by 25 basis points three times before the end of the year: to 4.00% to 4.25% in September, to 3.75% to 4.00% in October, then to 3.50% to 3.75% in December. The Fed increased rates for the first time in roughly three years when it changed the rate to 3.75% to 4.00% in September 2026.
» Are rates going up or down? Check out NerdWallet’s savings forecast
What happens when the Fed raises interest rates?
First, some context on Fed rate hikes. The Federal Reserve raises the federal funds rate to curb inflation. When it increases the Fed rate, banks pay more to borrow money from one another. When the federal funds rate rises, it doesn’t just affect banks sending and receiving money. Those banks pass on that expense to customers by charging higher interest rates on products like credit cards and mortgages. The idea is that by increasing the cost of credit, demand for goods and services will fall, causing their prices to subsequently fall, too.
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Here’s why that happens: The Federal Reserve can change only the federal funds rate. But since that rate is tied to other rates and variables, those changes have wide-reaching effects. When the Fed rate goes up, it’s more expensive for banks to borrow money. So it gets more expensive for consumers to borrow money, too. Anything tied to financing, including credit cards, car payments, student loans or mortgages, can get pricier.
On the other hand, a rising rate can lead to higher yields for savers and better rates for CD investors in some bank accounts.
» MORE: See our CD rates forecast
News moves fast. Stay ahead of how it could impact your money.
How does the Fed change interest rates?
The Federal Open Market Committee, a 12-member group of banking leaders from around the country, sets the federal funds rate and much of the Federal Reserve’s monetary policy. It typically meets eight times a year and sometimes makes rate changes — including increases or decreases — outside its scheduled meetings.
Here's the 2026 FOMC meeting schedule:
- Jan. 27-28.
- March 17-18.
- April 28-29.
- June 16-17.
- July 28-29.
- Sept. 15-16.
- Oct. 27-28.
- Dec. 8-9.
Does the president control interest rates?
The FOMC is the only authority on federal funds rate actions. It is a nonpolitical entity and operates independent of the president.
Still, presidents can exert indirect influence over how rate decisions are made. Here’s how:
- Appointing officials. The president is in charge of appointing Federal Reserve Board officials, including the chair of the Fed.
- Taking executive actions. The president can take actions to impact the economy including inflation and growth.
- Directing policy decisions. The president can influence Congress to create fiscal policy like spending and tax legislation, which would have economic effects including.
What is the Federal Reserve Board?
The Federal Reserve Board is the umbrella agency that governs the Federal Reserve System. It comprises three groups: the 12 Federal Reserve Banks in the U.S., the Board of Governors and the Federal Open Market Committee.
The Federal Reserve Board is responsible for the Federal Reserve achieving its three Congressional mandates: maintaining maximum employment, steady prices on goods and services, and moderate interest rates throughout the country.
More fed rate coverage
(Photo by Anna Moneymaker/Getty Images)
