Fed Delivers First Rate Hike Since 2023 — Unanimous 25bp Move Lifts Funds Rate to 3.75-4.00%

The FOMC voted unanimously to raise the federal funds rate 25 basis points to a target range of 3.75%-4.00%, the Fed's first hike since July 2023, ending more than three years without an increase. The post-meeting statement said 'inflation remains elevated' and that 'today's policy action will support a timelier return to the Committee's 2 percent goal.' The updated Summary of Economic Projections showed the median 2026 rate dot rising to 4.1%, up from June's 3.8% — four members projected a further 50 basis points of hikes before year-end, while two saw no additional moves. The unanimous vote was notable given Chair Kevin Warsh was appointed by President Trump, who has pushed publicly for lower rates; Warsh's press conference instead emphasized rebuilding the Fed's inflation-fighting credibility, citing stubborn CPI/PPI readings and the Gulf-driven oil shock. Equities took the move in stride: the S&P 500 rose about 0.3%, the Nasdaq added roughly 0.7%, and the Dow slipped about 44 points (-0.1%), while the 10-year Treasury yield eased back below 5% to roughly 4.95% following the announcement, having touched a post-2007 high of 5.02% the day before.