The Fed Has Raised Rates for the First Time Since 2023. The Vote Was 12-0.

The Federal Open Market Committee raised its target range for the federal funds rate by a quarter of a percentage point on September 16, to 3.75-4.00 percent. It is the Committee's first increase since 2023. Twelve members voted for it and none against.

What the statement actually says

The statement is unusually short. It describes economic activity as expanding at a solid pace, says uncertainty remains elevated partly because of geopolitical developments, and calls domestic spending resilient. It records strong productivity growth and robust capital investment. On the labour market it says job gains have kept pace with the workforce and the unemployment rate has changed little. Then it turns to prices.

Inflation remains elevated. Today's policy action will support a timelier return to the Committee's 2 percent goal. The Committee will deliver price stability.

There is no forward guidance in the statement about the next meeting, no reference to being data dependent, and no paragraph setting out what the Committee would need to see before moving again. The word the statement uses about its own action is "timelier" - a comparative, measured against the path the previous target range implied.

The administered rates that do the work

The target range is a range. The rates that hold the effective federal funds rate inside it are set in a separate document, the implementation note, published the same afternoon. Those moved too.

• Interest on reserve balances: 3.90 percent, effective September 17.
• Primary credit rate at the discount window: 4.00 percent, a quarter-point increase, effective September 17.
• Overnight repurchase agreement operations: offering rate of 4.00 percent.
• Overnight reverse repurchase agreements: 3.75 percent, with a limit of $160 billion per counterparty per day.

The discount rate increase was approved on requests from the boards of seven of the twelve Reserve Banks: Cleveland, Richmond, Atlanta, Chicago, Minneapolis, Kansas City and Dallas. The implementation note lists those seven. It does not say anything about the other five.

The balance sheet did not change direction

The statement says the Committee is continuing its policy of maintaining ample reserves in the banking system. The directive to the New York Fed's open market desk authorises purchases of Treasury bills and Treasury securities with maturities of three years or less to keep reserves ample, rolling over all principal payments from Treasury holdings at auction, and reinvesting principal from agency securities into Treasury bills. Nothing in that changed with the rate decision.

Where to read it

The statement and the implementation note are both published on the Federal Reserve Board's website under the September 16 press releases. They are two documents, and the second one is where the operational detail lives.