The Fed Just Raised Rates: What Moves in Your Money This Month (and What Doesn't)
A quarter point sounds small, and on its own it mostly is. What matters is which of your accounts reprice, how soon, and whether the rates underneath them were already too high. Here is the timeline, product by product.
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📐 Figures verified Sep 27, 2026 against the Federal Reserve's September 16, 2026 statement and implementation note, the Fed's H.15 release, Regulation Z and StudentAid.gov. How we check numbers →
The Fed raised its target range a quarter point to 3.75%–4.00% on September 16, 2026, and the prime rate rose to 7.00% the next day. Variable-rate debt reprices first: credit cards within a statement or two, HELOCs at the next cycle, ARMs at their reset date. Savings yields follow more slowly. Fixed-rate loans you already have don't change.
Numbers That Matter
| Figure | Amount | Source | Verified |
|---|---|---|---|
| Federal funds target range | 3.75%–4.00%, up 0.25 point | FOMC statement, Sept. 16 | Sep 27, 2026 |
| Effective date | September 17, 2026 | FOMC statement, Sept. 16 | Sep 27, 2026 |
| Prime rate at major banks | 7.00%, up from 6.75% | Federal Reserve H.15 | Sep 27, 2026 |
| Interest on reserves / discount rate | 3.90% / 4.00% | Fed implementation note | Sep 27, 2026 |
| Advance notice for an index-driven card APR increase | Not required | Regulation Z §1026.9(c) | Sep 27, 2026 |
| Existing federal student loans | Fixed rate; new-loan rates reset each July 1 | StudentAid.gov | Sep 27, 2026 |
| Next FOMC decisions | October 28 and December 9, 2026 | FOMC calendar | Sep 27, 2026 |
What the Fed Did
On September 16, 2026 the Federal Open Market Committee voted 12–0 to raise the federal funds target range by a quarter point, to 3.75%–4.00% from 3.50%–3.75%, effective September 17. It was the Fed's first increase since 2023. The Board also raised the interest it pays on bank reserves to 3.90% and the discount-window primary credit rate to 4.00%, and the big banks moved their prime rate to 7.00% from 6.75% the next morning.
Nobody borrows at the federal funds rate directly. It is what banks charge each other overnight, and it reaches your accounts through other benchmarks: the prime rate behind most credit cards and HELOCs, the SOFR index behind many adjustable loans, Treasury bill yields and the rates banks decide to pay on deposits. Each moves on its own schedule, which is why one decision reaches different accounts weeks or months apart.
- September 16: the first rate increase since 2023, a unanimous quarter point to 3.75%–4.00%.
- September 17: the new range took effect, and the prime rate rose to 7.00%.
- Officials' median projection now implies one more quarter-point increase by December and no cut until 2028 (our report on the decision).
- Still to come this year: decisions on October 28 and December 9.
The Repricing Timeline, Product by Product
A quarter point on $10,000 is $25 a year. That rule of thumb holds for anything tied to a benchmark that moves one-for-one with the Fed. The question is when, and whether, the change reaches each account.
| What you have | Tied to | When this hike reaches it |
|---|---|---|
| Credit card with a variable APR | Prime rate plus a margin | Usually within one or two statements |
| HELOC | Prime rate plus a margin | Usually the next billing cycle |
| Adjustable-rate mortgage | An index such as SOFR or a Treasury yield | Only at the next scheduled reset, within the caps |
| Private variable-rate student loan | Usually SOFR | At the next monthly or quarterly adjustment |
| Money market fund | Short-term market rates | Within days to a few weeks |
| Savings or money market account | The bank's own decision | Weeks to months, often less than the full quarter point |
| New CD or Treasury bill | Current market rates | New purchases only; T-bill yields often move before the meeting |
| New fixed-rate mortgage or car loan | Longer-term Treasury yields and lender pricing | Indirectly; can rise or fall regardless of the decision |
| Fixed-rate loans you already have | Fixed at signing | Never |
| I bonds | Inflation plus a fixed rate reset each May and November | Not tied to the Fed |
Timing depends on each contract. Your card or loan agreement names the index and the date your rate adjusts.
Borrowing: What Gets More Expensive
Credit cards feel it first. Most card APRs are the prime rate plus a fixed margin written into your agreement, so a card at prime plus 15 points went from 21.75% to 22.00%. Under Regulation Z, the issuer doesn't have to send the 45-day notice required for other rate increases when the change comes from the index your agreement names. The new rate simply appears on a statement, usually within one or two billing cycles.
HELOCs work the same way and usually adjust at the next billing cycle. Adjustable-rate mortgages don't move until their scheduled reset, and then by the change in their index, within the caps in the note. Private student loans with variable rates generally track SOFR and adjust monthly or quarterly. Shopping for a new car loan or personal loan? Expect quotes to drift up. Loans you already signed at a fixed rate don't change.
The real cost isn't the quarter point; it's the level underneath it. Every $10,000 of card debt at 22% costs about $2,200 a year in interest, and the hike added $25 of that. The payoff order hasn't changed: highest rate first, and variable rates ahead of fixed ones at the same rate, since variable rates can keep climbing.
Saving: What Pays More, Eventually
Savings respond more slowly and less completely. Money market funds hold short-term securities that reprice quickly, so their yields tend to follow within days or weeks. Banks set savings and money market account rates at their own discretion; many raise them late and by less than the Fed's move, and some don't raise them at all. Existing CDs keep their rate until they mature, while new CDs and new Treasury bills are priced off current markets. T-bill yields often rise before a meeting because traders price in the expected decision.
That lag is the case for checking what your cash actually earns. Each quarter point passed through on $15,000 is $37.50 a year, and money parked in a checking account paying close to nothing captures none of it. We don't list bank rates, but our guide to high-yield savings accounts and our rate comparison page explain what to look for.
What Doesn't Change
- Fixed-rate mortgages you already have. The rate and principal-and-interest payment stay the same; only escrow for taxes and insurance can move.
- Fixed-rate car and personal loans. Locked at signing.
- Federal student loans. Each loan's rate is fixed for its life. New loans get a rate set once a year from the May 10-year Treasury auction, effective July 1 (StudentAid.gov).
- I bonds. Their rate comes from inflation and a fixed rate that Treasury resets each May and November.
- Social Security. Its cost-of-living adjustment follows inflation, not the Fed; the 2027 figure is due October 14 with the September inflation report.
Mortgages: Why Fixed Rates Run on a Different Clock
A 30-year fixed rate is priced off the market for long-term bonds, mainly the 10-year Treasury yield and mortgage-backed securities, which reflect where investors think inflation and short-term rates are heading. That's why mortgage rates can climb before a Fed hike, or fall after one. They had been rising anyway: Freddie Mac's weekly average reached 7.03% on September 24 (our mortgage report). If you have an adjustable-rate mortgage, look up your next reset date and your caps now, so a higher payment isn't a surprise.
Worked Example: The Ramos Household
The Ramoses carry an $8,000 credit card balance at prime plus 15 points, a $40,000 HELOC at prime plus half a point, a $22,000 car loan at a fixed 6.9% and $15,000 in savings.
- Credit card: the APR moves from 21.75% to 22.00%, adding $20 a year. The balance still costs about $1,760 a year in interest.
- HELOC: 7.25% becomes 7.50%, adding $100 a year, for about $3,000 a year in total.
- Car loan: fixed, so no change.
- Savings: $37.50 more a year if the bank passes the full quarter point through, $18.75 if it passes half.
- Net: about $120 a year more in borrowing costs, roughly $10 a month, against at most $37.50 more in interest earned. One more hike in December would double the borrowing hit to about $240 a year.
The bigger number isn't the hike. Paying off the $8,000 card would save about $1,760 a year in interest, roughly 15 times what the hike added to the family's borrowing costs.
What Could Happen Next
The next two decisions are scheduled for October 28 and December 9, 2026. In September, officials' median projection pointed to one more quarter-point increase by year-end and no cut until 2028, though projections move with the data. Each additional quarter point adds roughly another $25 a year per $10,000 of variable-rate debt, and some pressure on banks to pay savers more. We update this page after each decision.
Decision Rules
If this, then that
- If you carry a card balance → pay down the highest APR first. A balance-transfer offer or a fixed-rate personal loan can lock a lower rate, but compare the fees first.
- If you have a HELOC balance → ask whether your lender lets you convert part of it to a fixed rate, and weigh the fee against the rate difference.
- If you have an ARM → find your next reset date and caps. If you're weighing a refinance, compare against today's fixed quotes, not last year's.
- If your cash earns close to nothing → move emergency savings to an insured savings account or a money market fund; the gap widens with every hike.
- If you're considering CDs or T-bills → match the term to when you'll need the money rather than locking long to chase a rate that may still rise.
- If you're about to take a fixed-rate loan → lock when the payment fits your budget; trying to time the Fed rarely pays.
Mistakes to avoid
- Assuming a fixed mortgage or car payment will rise. It won't.
- Waiting for your bank to raise your savings rate on its own.
- Worrying about the quarter point while ignoring the 20%-plus card rate it sits on.
- Locking a five-year CD with money you may need next year.
- Expecting federal student loan rates to change; they're fixed.
Related: home equity loans vs HELOCs explains fixed versus variable home borrowing; how to read your credit card statement shows where your APR and its index appear; and how to pay off credit card debt lays out the payoff methods. More rate coverage is in the Economy, Rates & Inflation hub.