The Federal Reserve has raised the target range for the federal funds rate by 1/4 percentage point to 3-3/4 to 4 percent. This decision was made in support of the Federal Reserve's dual mandate, which aims to promote maximum employment and price stability. The Committee is continuing its policy of maintaining ample reserves in the banking system. Economic activity is expanding at a solid pace, with domestic spending being resilient despite elevated uncertainty due to geopolitical developments. Productivity growth is strong, and capital investment is robust, with job gains keeping pace with the workforce and the unemployment rate remaining largely unchanged. However, inflation remains elevated, and the Committee's policy action is intended to support a timelier return to its 2 percent goal. The interest rate paid on reserve balances has been raised to 3.90 percent, effective September 17, 2026. The primary credit rate has also been increased by 1/4 percentage point to 4.0 percent, effective September 17, 2026. The Federal Reserve will undertake open market operations as necessary to maintain the federal funds rate in the target range and conduct standing overnight repurchase agreement operations at a rate of 4.0 percent. The Committee will also conduct standing overnight reverse repurchase agreement operations at an offering rate of 3.75 percent, with a per-counterparty limit of $160 billion per day. The Federal Reserve's decision to raise interest rates is a significant development in the US economy, as it aims to control inflation and maintain economic growth. The decision may have implications for consumers, businesses, and investors, as higher interest rates can affect borrowing costs, employment, and economic activity. The Federal Reserve's actions will be closely watched by market participants, as they seek to understand the impact of the decision on the economy and financial markets.