The week, explained: September 14 to 18, 2026

The Federal Reserve raised its main interest rate target on September 16. Short-term Treasury yields rose over the week, longer-term yields moved less, and the 30-year yield ended slightly lower. The latest national inflation and unemployment rate figures, both for August 2026, were published before this week.

The Federal Reserve raised its target range for the federal funds rate

The Federal Open Market Committee, the group inside the Federal Reserve that sets interest rate policy, met on September 15 and 16. In its statement on September 16, the Committee said it decided to raise the target range for the federal funds rate by a quarter of a percentage point, to 3-3/4 to 4 percent. The range before the meeting was 3.50 to 3.75 percent. The statement records a vote of 12 to 0.

The federal funds rate is the interest rate banks charge each other to borrow money overnight. The Federal Reserve does not set it by decree; it announces a target range and uses its tools to keep the actual rate inside that range. The actual rate, called the effective federal funds rate, was 3.88 percent on September 17, within the new range of 3.75 to 4.00 percent.

The Federal Reserve gave its own reasons in the statement. It said economic activity is expanding at a solid pace, that job gains have kept pace with the workforce and the unemployment rate has changed little, and that inflation remains elevated. It said the policy action would support "a timelier return" to the Committee's 2 percent inflation goal.

On the same day, the Federal Reserve Board and the Committee released the economic projections prepared for the September 15-16 meeting. Those are the individual forecasts of meeting participants, not decisions, and this report does not repeat forecasts.

Treasury yields rose at shorter terms and were flat at the longest

A Treasury security is a loan you make to the US federal government. Bills mature in a year or less, notes in two to ten years, and bonds run longest. The yield is the annual return you would earn buying at the current price and holding until the loan is repaid.

From September 11, the last reading before the week began, to September 18:

• 3-month bill: 4.07 to 4.14 percent, up 0.07 percentage points
• 2-year note: 4.63 to 4.76 percent, up 0.13 percentage points
• 10-year note: 4.96 to 5.01 percent, up 0.05 percentage points
• 30-year bond: 5.35 to 5.34 percent, down 0.01 percentage points

Yields on short Treasury securities generally stay close to the federal funds rate, because both are prices for lending money for a short period. Yields on 10-year and 30-year Treasuries reflect what buyers and sellers will pay today for a much longer loan, so they can move differently, or barely move at all, in a given week.

Yields and bond prices move in opposite directions

Suppose you pay $1,000 for a Treasury note paying 5 percent a year, or $50. If yields on newly issued notes rise to 5.5 percent, a new $1,000 note pays $55. Nobody will pay $1,000 for your $50 a year when $55 is available, so the price of your note falls until its return matches what is on offer.

The reverse is also true: when yields fall, the price of a bond issued earlier rises. If you hold a Treasury security until it matures, you are repaid its face value whatever the price did along the way. If you sell earlier, or hold a bond fund whose value is the market price of the bonds inside it, those swings show up in what your holding is worth.

What this means in everyday terms

Rates paid on savings accounts and on certificates of deposit, which are deposits locked up for a set term, tend to follow short-term rates, though banks set their own rates and can move slowly or not at all. Borrowing costs tied to the prime rate, such as many credit cards and variable-rate loans, tend to move with the federal funds rate. Mortgage rates track longer-term yields more closely than the Fed's target.

For background, the most recent official figures, both published before this week, were a Consumer Price Index 3.4 percent higher in August 2026 than a year earlier, and an unemployment rate of 4.1 percent in August 2026.

How any of this touches your own saving or borrowing depends on your circumstances, and a licensed professional can help with individual decisions.