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Story · United States · Published 16 Sept 2026, 19:24

Fed raised its target interest-rate range at 3.75%–4.0%

The Federal Reserve raised its target interest-rate range at 3.75%–4.0%, setting the latest stance of U.S. monetary policy.

Monetary Policy
Updated 16 Sept 2026, 19:24Occurred 16 Sept 2026, 18:00Exam relevance 98/100
The Federal Reserve Board building in Washington, D.C.

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Primary sourceFederal Reserve Board →Federal Reserve issues FOMC statement
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3.75%

Federal funds target lower bound

4.0%

Federal funds target upper bound

raise

Policy decision

Exam link: Monetary policy → interest rates → consumption and investment → aggregate demand

Story toolsReport / correction
Understand the storyExpand

The Federal Open Market Committee raised the target interest-rate range at 3.75%–4.0%. The decision gives students a current example of how a central bank uses interest rates to influence demand, inflation and wider economic activity.

What happened

At its latest policy meeting, the Federal Open Market Committee raised its target range for the federal funds rate at 3.75%–4.0%.

Why it matters

Changes in the policy rate can affect borrowing costs, saving incentives, asset prices, exchange rates and aggregate demand. Expectations about future policy can also move financial conditions before rates change again.

Economic context

For A-Level Economics, this is direct evidence for monetary policy, interest-rate transmission, inflation control and policy trade-offs. It can support analysis of how tighter, looser or unchanged policy may affect consumption, investment and aggregate demand.

All key dataExpand
Policy decision
raise
Federal funds target lower bound
3.75%
Federal funds target upper bound
4.0%
Terms explainedExpand

Fed target range

The range the Federal Reserve sets for its main short-term policy interest rate, which influences borrowing costs across the U.S. economy.

Use it in an examExpand

Evidence

The Federal Reserve raised its target interest-rate range at 3.75%–4.0%, setting the latest stance of U.S. monetary policy.

Explain

Changes in the policy rate can affect borrowing costs, saving incentives, asset prices, exchange rates and aggregate demand. Expectations about future policy can also move financial conditions before rates change again.

Evaluate

For A-Level Economics, this is direct evidence for monetary policy, interest-rate transmission, inflation control and policy trade-offs. It can support analysis of how tighter, looser or unchanged policy may affect consumption, investment and aggregate demand.

Find related examples →

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