Fed raises rates to 3.75%-4%, first hike since 2023

The Federal Reserve has raised the benchmark rate by 25 basis points, bringing it to 3.75%-4%. This is the first rate hike by the US central bank since July 2023, a shift from the monetary policy cycle followed up to this point. The news currently comes from a single source, the Federal Reserve itself through its official statement; no independent confirmations are available on the details of the decision.

The decision comes after a core PCE inflation reading that came in above the 2% target set by the central bank, along with mixed signals on the US labor market. The FOMC statement does not report internal Committee reasoning beyond these two cyclical factors, and no further readings are currently available on the choice to act in this context.

On September 16 the Fed also published the new “dot plot,” the chart that gathers individual FOMC members’ projections on the future path of rates. The document shows marked dispersion of views: for the end of 2026 some members indicate the possibility of further hikes, between a quarter and half a percentage point. The projections do not specify whether other members instead expect stabilization within the same horizon. For the end of 2027 the projections of individual Committee members diverge by about one percentage point, a gap that signals the absence of a shared line for the medium term.

This internal divergence within the FOMC signals that, while having acted in unison on September’s decision, the Committee remains divided on the trajectory to follow over the next two years. The next “dot plot,” expected in the following months, will be the first useful reference to check whether the current dispersion among members has narrowed or widened.