Last updated: 4 September 2026.
When Is the Next Fed Interest Rate Decision?
The next Federal Reserve interest rate decision is on Wednesday 16 September 2026, announced at 2:00 PM US Eastern Time (7:00 PM UK time), followed by a press conference from Chair Kevin Warsh at 2:30 PM ET. The two-day meeting runs 15–16 September. It is one of four a year carrying an updated Summary of Economic Projections, including the “dot plot” of where policymakers expect rates to go — so it will tell markets far more than a bare hold or hike.
FOMC meeting dates 2026:
- 27–28 January — held at 3.50–3.75%
- 17–18 March — held at 3.50–3.75% (projections)
- 28–29 April — held at 3.50–3.75%
- 16–17 June — held at 3.50–3.75% (12–0; dot plot turned hawkish)
- 28–29 July — held at 3.50–3.75% (9–3; three dissents preferred a hike)
- 15–16 September — next decision, announced 16 September (updated projections)
- 27–28 October
- 8–9 December (updated projections)
What Is the Current US Interest Rate?
The current US federal funds target range is 3.50%–3.75%. It has been held at this level since December 2025, following three 0.25-point cuts in September, October and December 2025. The federal funds rate is the most important interest rate in the US economy: it influences borrowing costs, savings rates and — because the dollar sits on one side of most currency pairs — global exchange rates. For how that feeds through to the pound, see our GBP/USD forecast.
What Has Changed Since the July Fed Decision?
Three things have moved the debate between the July and September meetings, and they do not all point the same way.
Inflation kept cooling. US headline CPI eased to 3.4% in the year to July 2026, from 3.5% in June, with prices up just 0.1% on the month. Core CPI, which strips out food and energy, slowed to 2.5% from 2.6% (Bureau of Labor Statistics, released 12 August 2026). On the CPI numbers alone, the case for raising rates got weaker, not stronger.
The Chair sounded hawkish anyway. In his keynote at the Jackson Hole symposium on 28 August 2026, Warsh pointed to 12-month PCE inflation running at 3.7% and described progress over the past two years as modest, saying the Federal Reserve must be “confident that underlying inflation is moving to our objective, clearly and at sufficient speed” (Federal Reserve Board). He also declined to offer forward guidance, committing the committee to “a discipline, not to a decision”. Markets read the speech as opening the door to a rise, and pricing for a September hike moved above 50% in the days that followed.
The labour market held up. The August employment report, released on 4 September 2026, showed nonfarm payrolls up 162,000 with the unemployment rate unchanged at 4.1% and average hourly earnings up 0.3% on the month (Bureau of Labor Statistics). A solid jobs print removes one of the main arguments against tightening: the committee does not have to weigh a rate rise against a visibly weakening labour market.
Will the Fed Raise Rates in September 2026?
A rise to 3.75%–4.00% is now priced as the more likely outcome, but it is not settled. That is a genuine shift: for most of 2026 a hold was the clear base case, and the three dissenting votes in July were treated as a minority position. After Jackson Hole, market-implied odds of a September increase moved from roughly a coin flip to around two-thirds on CME FedWatch-based estimates in the final days of August.
The counter-argument is the data itself. Headline and core CPI have both fallen for two consecutive months, and a committee that raises rates into cooling inflation would be acting on a forecast rather than an outturn. The gap between what the CPI shows and what the Chair has signalled is the reason this decision is unusually hard to call, and why the dot plot published alongside it may matter more than the rate itself.
| 16 September scenario | Market pricing | USD impact |
|---|---|---|
| Hike to 3.75–4.00% | Now the majority expectation | USD-positive — GBP/USD could ease toward 1.32, EUR/USD toward 1.13 |
| Hold at 3.50–3.75%, hawkish dot plot | Live minority | Mixed — initial USD weakness, tempered by the projections |
| Hold at 3.50–3.75%, softer tone | Lower after Jackson Hole | USD-negative — GBP/USD could push above 1.37 |
Scenarios reflect Cambridge Currencies’ reading of the July statement, the August data and market pricing; they are not Federal Reserve forecasts, and rates may move either way. See our currency forecasts hub and the latest weekly currency forecast for fuller analysis.
How the Fed Decision Affects the Pound, Euro and Your Transfers
Because the dollar is on one side of most major pairs, the Fed’s stance ripples far beyond the US. As at 4 September 2026, GBP/USD traded near 1.3525 and EUR/USD near 1.1628, with the dollar index (DXY) around 99.0 — a softer dollar than in late July, despite the hawkish turn in rhetoric. A “higher for longer” Fed tends to support the dollar, making dollars more expensive to buy and weighing on GBP/USD and EUR/USD; clear signals of cuts tend to do the opposite.
The scale matters on large sums. A UK business buying $500,000 to pay a US supplier would spend about £369,700 at an illustrative 1.3525; at 1.32 the same dollars cost roughly £378,800 — about £9,100 more from a three-cent move. On a property purchase or a £500k transfer, the Fed’s direction is not an abstraction.
- UK businesses paying USD invoices: a stronger dollar raises the sterling cost of US suppliers — see how exchange rates affect UK business and FX hedging strategies.
- Buying US property or moving large sums: dollar strength cuts overseas purchasing power — see large international money transfers and our guide to sending money to the USA from the UK.
- Gulf transfers: because the UAE dirham is pegged to the dollar at 3.6725 and the Saudi riyal at 3.75, Fed policy passes almost directly into those corridors — a firmer dollar lifts the sterling cost of buying AED or SAR. See sending money to Dubai.
This September the two decisions land almost together: the Fed on 16 September, the Bank of England on 17 September. Two central bank announcements inside 24 hours is the kind of window where GBP/USD can move several cents, and the order matters — sterling will be reacting to the Fed before its own committee has spoken. See our next Bank of England interest rate decision update for the UK side.
Markets often move before announcements, so waiting for the decision can mean the move has already happened. Clients commonly use a forward contract to lock today’s rate ahead of a meeting, or split a large transfer either side of it to average their rate. For the euro leg of the same question, see our euro-to-dollar forecast.
What the Fed Did on 29 July 2026
The Federal Reserve held the federal funds target range at 3.50%–3.75% on 29 July 2026, where it has stood since December 2025. The Federal Open Market Committee voted 9–3 to hold, in Chair Kevin Warsh’s second meeting.
The three dissenters — Cleveland’s Beth Hammack, Minneapolis’ Neel Kashkari and Dallas’ Lorie Logan — each preferred a 0.25-point increase to 3.75%–4.00%. Dissents in favour of higher rates are unusual, and in hindsight they were the leading edge of the shift that Jackson Hole confirmed.
The statement described US economic activity as “expanding at a solid pace,” said job gains have kept pace with the workforce, and repeated that inflation “remains elevated relative to the Committee’s 2 percent goal,” citing supply shocks in energy and other sectors. Under Warsh the Fed has pared back its forward guidance, leaving markets to lean more heavily on the data between meetings — which is exactly why the August prints moved pricing as much as they did.
Frequently Asked Questions
When is the next Fed interest rate decision?
The next Federal Reserve decision is on Wednesday 16 September 2026, at 2:00 PM US Eastern Time (7:00 PM UK time), with a press conference at 2:30 PM ET. The two-day meeting runs 15–16 September and carries updated economic projections. The remaining 2026 FOMC meetings are 27–28 October and 8–9 December.
What is the current US interest rate?
The current US federal funds target range is 3.50%–3.75%. The Fed has held it there since December 2025, most recently on 29 July 2026 under Chair Kevin Warsh.
Will the Fed raise rates in September 2026?
Markets have moved to price a 0.25-point rise to 3.75%–4.00% as more likely than not, after Chair Warsh’s hawkish Jackson Hole speech on 28 August and a solid August jobs report. It is not a settled outcome: headline CPI has fallen for two months running, to 3.4% in July, which argues for patience. The committee could also hold while signalling a rise later in the year through its updated projections.
Why did the Fed hold rates in July 2026?
The energy-led inflation spike that pushed headline CPI to 4.2% in May reversed in June, with prices falling on the month, so the majority judged it could wait. Three dissenters preferred to raise rates pre-emptively while inflation stayed above target and Middle East energy risk lingered.
Do the Fed and the Bank of England decide in the same week?
Yes. The Fed announces on Wednesday 16 September 2026 and the Bank of England on Thursday 17 September 2026, less than 24 hours apart. GBP/USD is exposed to both, and the dollar leg lands first.
How does the Fed affect the pound and the euro?
The federal funds rate, and expectations of where it goes next, shape the dollar’s value against other currencies. A higher or “higher for longer” US rate tends to strengthen the dollar and pull GBP/USD and EUR/USD lower; signals of cuts tend to weaken it. See our euro-to-dollar forecast.
Should I wait for the next Fed decision before transferring dollars?
Markets usually price expected decisions in advance, so waiting often means the move has already happened — and with a hike now the majority expectation, a good deal of that adjustment may already sit in the rate. A forward contract lets you fix today’s rate and removes the need to time the meeting. Cambridge Currencies works with clients to plan dollar transfers around FOMC dates.
Moving dollars either side of the 16 September Fed decision? Request a free quote and a Cambridge Currencies specialist will talk through your timing and the options for splitting or fixing the transfer. Every transfer is completed by phone with a dedicated specialist who knows your situation.
Cambridge Currencies Ltd arranges international payments through its FCA-authorised partners, Currencycloud (FRN 900199) and ScioPay (FRN 927951). This is general market information, not guidance on a specific transaction; exchange rates move and past movements are not a guide to future rates.
Related guides: USD forecast 2026 · GBP/USD forecast · Next Bank of England rate decision · What is a forward contract?
