Definition
federal-reserve actions managing money supply and interest-rates to pursue dual mandate: price stability and maximum employment.
Key Points
- 2026-09-16: FOMC unanimously raised fed funds target 25bp to 3.75%-4.00% — first hike since July 2023 under Chair kevin-warsh (2026-09-16-fed-rate-hike-cnbc)
- SEP median: 4.1% fed funds at end-2026; 16/18 participants see another hike possible this year
- Drivers: elevated inflation (PCE 3.7% 2026), tariffs, Iran-war energy shock, AI capital spending (2026-09-16-fed-rate-hike-reuters)
- Major banks raised prime to 7%