Story perspectives

Fed Raises Rates to 3.75%–4.00%, Lifting Mortgage Costs

By Drooid · Sep 18, 2026, 2:04 PM UTC · How we work

Summary

Fed Raises Rates

The Federal Reserve (Fed) raised the federal funds rate by 25 basis points to 3.75%–4.00%.
Higher August PPI and core CPI lifted 10-year Treasury yields, pressuring mortgage rates.
30-year fixed mortgage rates rose to 7.43% and APR to 6.97% in mid-September, per Zillow.
Analysts advise borrowers to shop lenders, consider rate locks, improve credit, and note few refinancers will save half a point.

Summary

Warsh Defends Independence

Fed Chair Kevin Warsh said Fed will not tolerate inflation despite President Donald Trump’s calls for lower rates.
Trump warned he would intensify trade wars if the Fed does not cut rates, demanding the lowest global borrowing costs.
Warsh told reporters he has nothing to say about discussions with the president, emphasizing Fed independence.
Warsh noted the Fed cannot directly control oil or grocery prices, highlighting limits of monetary policy.

History

Historical Context

After Paul Volcker became Fed chairman in August 1979, he pushed the federal-funds rate from 11 % to a 20 % peak in June 1981, driving inflation down from a 14.8 % high in March 1980 to below 3 % by 1983 but sparking a recession with unemployment above 10 %. Today, Fed chair Kevin Warsh and President Donald Trump echo that tension, demanding lower rates despite rising mortgage yields.

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Fed Raises Rates

The Federal Reserve (Fed) raised the federal funds rate by 25 basis points to 3.75%–4.00%.
Higher August PPI and core CPI lifted 10-year Treasury yields, pressuring mortgage rates.
30-year fixed mortgage rates rose to 7.43% and APR to 6.97% in mid-September, per Zillow.
Analysts advise borrowers to shop lenders, consider rate locks, improve credit, and note few refinancers will save half a point.

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