Politics
The Fed voted 12-0 to raise rates to 3.75%-4% on September 16. Kevin Warsh — Trump's own appointee — voted with the majority. Trump had spent the summer posting public ultimatums demanding cuts. The Iran war energy shock made inflation worse. Another hike is expected before year end.
NewsOnScale Staff
September 17, 2026
The Federal Reserve raised interest rates on September 16 2026 — the first rate hike in more than three years. The vote was unanimous 12 to 0. Federal Reserve Chairman Kevin Warsh — handpicked by President Trump and sworn in on May 22 2026 — voted with the majority.
Trump had spent the summer publicly and loudly demanding rate cuts, threatening trade wars to pressure the Fed, and posting ultimatums on Truth Social. Warsh raised rates anyway.
What the Fed Did
The Federal Open Market Committee raised the benchmark overnight funds rate by a quarter percentage point to a target range of 3.75% to 4%.
Inflation remains elevated, the committee said in its post-meeting statement. Today's policy action will support a timelier return to the Committee's 2 percent goal. The Committee will deliver price stability.
Warsh told reporters that inflation had been too high for too long. Sixteen of the 18 FOMC participants expect another rate increase before the end of 2026. The Fed is not done.
Why Inflation Is Elevated
The Iran war that began February 28 2026 disrupted global oil supplies through the Strait of Hormuz — the chokepoint through which approximately 20% of the world's oil passes. Energy prices rose sharply. That energy price shock fed into broader inflation.
The current inflation situation is in part a consequence of the same undeclared conflict Congress has not authorized and the House left unaddressed when it went home for the midterms this morning.
The Trump-Warsh Dynamic
Trump appointed Warsh specifically because he wanted a Fed chair more aligned with his economic preferences. When asked before the appointment whether Warsh's historically hawkish leanings concerned him Trump said I've had times when I think you've had to really have rate hikes too.
That acknowledgment turned out to be relevant. Warsh's first major policy decision went the opposite direction of what Trump had been demanding publicly for months.
Treasury Secretary Scott Bessent had told CNBC on Monday that he did not think a rate hike was necessary, arguing that core inflation had remained very restrained. Warsh disagreed. The unanimous vote meant even the Fed governors Trump's administration influences voted to raise rates.
What This Means for Americans
The Fed's rate affects everything built on borrowed money. Several major banks began passing the increase along to credit card holders immediately following the announcement. The 30-year fixed mortgage rate stood at 7.19% going into the decision.
Americans already paying elevated prices at the gas pump — a direct consequence of Middle East energy disruption — are now also facing higher borrowing costs on credit cards, car loans, and mortgages.
The Honest Point
Trump's approach to the Federal Reserve has been to apply political pressure — threatening trade wars, calling board members political and hostile, posting public ultimatums. The strategy did not work. His own appointee raised rates in a unanimous vote.
The alternative — auditing the Fed, understanding what its balance sheet actually shows, and building an informed case for structural change — is a different and more durable approach to monetary policy accountability.
Political pressure on an independent institution is not the same as holding that institution accountable. Wednesday's unanimous rate hike demonstrated the difference.
DISCLOSURE: NewsOnScale is an independent media publication operated by AMILLI AI CORP. JJ Johnson is the founder of AMILLI AI CORP and a declared candidate for President of the United States in 2028. All facts in this article are drawn from CNBC, CNN Business, Reuters, Fortune, The Hill, and Yahoo Finance reporting published September 16-17 2026.