---
title: "Federal Reserve Hikes Interest Rates to 3.75-4% Range"
description: "A unanimous FOMC voted to lift the policy rate by 25 basis points as August payrolls expanded by 162,000."
url: https://basisdesk.news/news/fed-hikes-rates-august-jobs-resilient
published: 2026-10-02T18:06:37.558Z
modified: 2026-10-02T18:06:37.558Z
section: Macro & Markets
author: Basis Desk Newsroom (AI-generated, source-verified)
sentiment: bearish
tickers: [BTC, ETH, USDT]
tags: [Federal Reserve, FOMC, Interest Rates, Employment, Inflation, Macroeconomics]
license: Quote with attribution to Basis Desk (basisdesk.news). Not financial advice.
---

# Federal Reserve Hikes Interest Rates to 3.75-4% Range

A unanimous FOMC voted to lift the policy rate by 25 basis points as August payrolls expanded by 162,000.

## Key points

- The FOMC lifted the target federal funds rate by 25 basis points to 3.75-4% in a unanimous 12–0 vote on Sept. 16 [1].
- August nonfarm payrolls expanded by 162,000, well above the prior 12-month average of 31,000, while unemployment held at 4.1% [2].
- Average hourly earnings increased 3.1% year-over-year to $37.75, with food services adding 59,000 jobs and information shedding 23,000 [2].

## Editorial remark

- **Context:** The central bank acted after months of resilient growth and persistent price metrics, which challenged forecasts of rapid monetary easing. Strong hiring revisions for June and July reinforced policymakers' determination to maintain upward pressure on rates until inflation reaches their target.
- **Impact:** Higher policy rates sustain elevated capital costs for risk assets, including digital tokens and decentralized finance yields. Crypto valuations face prolonged competition from risk-free dollar cash yields remaining near 4 percent.
- **Watch:** The Bureau of Labor Statistics' release of the September 2026 Employment Situation report, scheduled for Oct. 2, 2026, at 8:30 a.m. Eastern Time.

The Federal Open Market Committee voted unanimously to lift the target range for the federal funds rate by 25 basis points to 3-3/4 to 4 percent on Sept. 16, citing persistent price pressures [1]. The 12–0 vote follows observations of solid economic expansion, robust capital investment, and resilient domestic spending despite geopolitical headwinds [1]. Committee officials stated the adjustment aims to accelerate a return to their 2 percent inflation target while preserving ample reserves across the banking system [1].

Labor market figures supported the monetary policy posture, with the Bureau of Labor Statistics reporting on Sept. 4 that total nonfarm payrolls rose by 162,000 in August [2]. The outcome substantially outpaced the preceding 12-month average monthly increase of 31,000 positions [2]. August's unemployment rate held steady at 4.1 percent with 7.0 million people unemployed, while prior hiring tallies saw upward revisions of 11,000 in June to 31,000 and 44,000 in July to 21,000 [2]. Sector gains were led by food services and drinking places (+59,000) and local government education (+42,000), while the information sector shed 23,000 roles [2].

## Wage Pressures and Market Reception

Wage metrics showed sustained gains, with private nonfarm average hourly earnings advancing 0.3 percent, or 10 cents, to $37.75 in August, marking a 3.1 percent rise year-over-year [2]. The average workweek rose slightly to 34.4 hours [2]. At the time of writing, digital assets traded largely flat against the backdrop of sustained monetary tightening, with $BTC at $84,834 (+0.1% 24h) and $ETH at $2,686 (−0.4% 24h). The broader cryptocurrency market capitalization stood at $2.86 trillion as sentiment registered a Fear & Greed reading of 72.

## FAQ

**What was the FOMC's policy decision?**

The Federal Open Market Committee voted unanimously 12–0 on Sept. 16 to increase the federal funds target range by 25 basis points to 3-3/4 to 4 percent [1].

**How did the US labor market perform in August 2026?**

Total nonfarm payroll employment added 162,000 jobs, exceeding the prior 12-month average of 31,000, while the national unemployment rate held at 4.1 percent [2].

## Sources

1. [Federal Reserve issues FOMC statement](https://www.federalreserve.gov/newsevents/pressreleases/monetary20260916a.htm) — federalreserve.gov, 2026-10-02
2. [Employment Situation News Release - 2026 M08 Results](https://www.bls.gov/news.release/archives/empsit_09042026.htm) — bls.gov, 2026-10-02

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Basis Desk Newsroom · AI-generated, source-verified · https://basisdesk.news/about/how-we-use-ai