The Federal Reserve raised its benchmark interest rate by 25 basis points on September 16, 2026, setting a target range of 3.75–4.00%. The decision was unanimous, with Chair Kevin Warsh citing persistently high inflation as the primary driver for the move.
Following the announcement, gold prices fell to a six-week low of $4,235 per ounce. However, the metal rebounded by nearly 2% in the subsequent session, reaching approximately $4,340 as Treasury yields and oil prices declined.
The Fed signaled at least one additional rate hike before the end of 2026. Updated projections now place the median inflation forecast, based on the Personal Consumption Expenditures index, at 3.7%.
August data showed the Consumer Price Index rose 0.4% month-over-month and 3.4% annually. Despite these pressures, gold remains in a trading range of $4,200–4,350, down from a yearly peak of near $5,600 per ounce.
