The Federal Reserve raised its benchmark interest rate by 25 basis points at its September 15-16, 2026, meeting, bringing the federal funds target range to 3.75%-4.00% in a unanimous 12-0 vote. It was the first increase since July 2023 and the first under Chair Kevin Warsh, who said inflation remained well above target. Minneapolis Fed President Neel Kashkari said price pressures had spread from an oil shock linked to the Iran war into services and the wider economy. The move pushed the two-year Treasury yield to about 4.75%, while markets priced roughly 0.8 percentage point of additional tightening over the following year. Some investors viewed short-dated Treasuries as attractive if inflation cools or the Fed hikes less than expected, although risks include energy prices, strong growth and the possibility of rates rising above 5%.