The Fed just delivered its first rate hike since 2023.

On September 16, the FOMC voted 12-0 to raise the federal funds target range by 25 basis points to 3.75%–4.00%. That follows a long pause: rates were held at 3.50%–3.75% through the June and July meetings (and earlier 2026 meetings as well). Markets had largely priced the move in.

The statement was short and pointed. Activity is expanding at a solid pace, the labor market is holding up, productivity and investment look strong—but inflation remains elevated. The Committee said the hike is meant to support a more timely return to the 2% goal and added, “The Committee will deliver price stability.”

This is the first major policy move under Chair Kevin Warsh. The updated dot plot shows most participants seeing at least one more increase by year-end, with a minority open to two. That is the new reference point: after an extended hold, the Fed is willing to tighten again while the economy still has room and inflation has not rolled over.

Will further hikes materialize? The data will decide. Resilient demand and still-high inflation give the Committee cover to stay restrictive. A sharper slowdown in jobs or a clear cooling in prices would quickly reopen the debate. The October and December meetings are now live.

For markets, the message is straightforward: the pause is over, and the path of least resistance for policy is no longer “hold and hope.”