The Fed Cycle

The Federal Reserve raises rates to cool inflation and cuts them to support growth. Here is how the Fed cycle has played out since 2020, including the rate increase of Sept. 16, 2026, and how stocks responded.

How the Fed moves

The Fed sets a target range for the federal funds rate, the rate banks charge each other overnight. Raising it makes borrowing more expensive and tends to slow spending and inflation. Cutting it does the opposite. Changes ripple through mortgage rates, bond yields and company borrowing costs.

Fed rate changes ripple through the economy.

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