Story perspectives

Fed Raises Rates 0.25 Points to 3.75–4%

By Drooid · Oct 8, 2026, 2:16 PM UTC · How we work

Summary

Story summary

The Federal Reserve raised the federal funds rate by 0.25 percentage point to 3.75-4 %.
Fed Chair Kevin Warsh said the hike removes a “dose of accommodation” and steers inflation toward 2 %.
Fed staff estimated August PCE inflation at 3.8% and projected the 2% goal not reached until 2029.
After the minutes, October-hike odds fell to about 20% while December odds rose to roughly 80%.

History

Historical Context

Facing double-digit inflation that peaked at 14.8 % in March 1980, Paul Volcker, appointed Fed chair in August 1979, lifted the federal-funds rate to a 20 % high in June 1981, driving CPI below 3 % by 1983 but triggering a deep recession. Today, Fed chair Kevin Warsh has nudged rates up 0.25 % to a 3.75-4 % target as inflation hovers near 3.8 %.

1 of 2

Story summary

The Federal Reserve raised the federal funds rate by 0.25 percentage point to 3.75-4 %.
Fed Chair Kevin Warsh said the hike removes a “dose of accommodation” and steers inflation toward 2 %.
Fed staff estimated August PCE inflation at 3.8% and projected the 2% goal not reached until 2029.
After the minutes, October-hike odds fell to about 20% while December odds rose to roughly 80%.

1 / 2