The Fed raises its rates for the first time since 2023: what the 16 September decision changes for your dollar payments

After several months of waiting and speculation, the Federal Reserve has made its decision. This rate hike, the first since 2023, reshapes dollar financing conditions for the coming months. Here is what you need to know about this decision and its practical implications for any business or individual making payments in US currency.

What happened on 16 September

Meeting on 15 and 16 September 2026, the FOMC voted unanimously to raise its key interest rate target range by 25 basis points, bringing it to 3.75%–4.00%. This is the first rate increase decided by the US central bank since 2023, following an extended period of stability and then gradual rate cuts introduced in 2024 and 2025. In its statement, the committee justified the move by citing persistent inflationary pressures and the strength of the jobs market, two factors that, in its view, warranted a tightening rather than the status quo.

Why the Fed chose to tighten now

Since the beginning of the year, US inflation has proved more stubborn than expected, driven in particular by trade tensions and rising energy prices observed in recent months. The committee considered that leaving rates unchanged risked entrenching inflation expectations over the long term, an outcome the central bank seeks to avoid. The labour market, which has remained robust despite slowing economic growth, reinforced this decision: the Fed has the leeway to tighten its monetary policy without posing an immediate risk to employment.

Kevin Warsh: a presidency under political pressure

This meeting was watched particularly closely, not only for its economic content, but also for its political context. Kevin Warsh, at the helm of the Fed since May 2026, once again chose not to publish interest rate projections—a decision that adds to questions surrounding the trajectory of US monetary policy over the coming months. His appointment and management of the Fed have created recurring friction with the Trump administration, which openly advocates lower interest rates. This increase, decided despite this political pressure, was viewed by the markets as a signal of the central bank's independence.

Immediate market reactions

The news immediately moved the financial markets. The dollar strengthened against major currencies as investors revised upwards their expectations for US real interest rates. Equity indices, on the other hand, retreated, as stock markets are traditionally sensitive to monetary tightening, which makes borrowing more expensive. Gold and oil also lost ground, while US bond yields rose, reflecting expectations of prolonged monetary tightening.

What this increase means in practice for your dollar payments

For a business paying suppliers, salaries, or service providers in dollars, a stronger dollar means a higher cost in euros for the same amount in foreign currency. This development particularly affects SMEs that import from the United States or from a country whose currency is pegged to the dollar, as well as businesses financing purchases or investments denominated in USD. Conversely, exporting companies that invoice in dollars and then convert into euros may see their margins expand, provided they have anticipated the timing of the conversion. In either case, the volatility that accompanies this type of decision highlights the value of foreign exchange hedging tools, which make it possible to lock in a rate in advance rather than being subject to market fluctuations when making a payment.

What to watch out for between now and the next meeting

The next FOMC meeting is scheduled for 27 and 28 October 2026. Several analysts anticipate another hike before the end of the year, particularly if forthcoming inflation releases confirm the trend observed this summer. However, the absence of quantitative projections from Kevin Warsh leaves an element of uncertainty regarding the exact path, which should keep volatility higher than average on the euro-dollar pair in the weeks ahead.

Summary

The rate hike on 16 September 2026 marks a turning point in US monetary policy and strengthens the dollar against the euro. For any business settling payments in foreign currency, this period of heightened volatility makes specialist support all the more valuable to secure your foreign exchange transactions and plan for your upcoming payment deadlines.

OSolto, a specialist in international payments registered with ORIAS (No. 26004337), supports French businesses with their international payments and foreign exchange hedging strategy. Contact us to review your upcoming dollar-denominated payments.

FAQ

Why did the Fed raise its rates in September 2026?

The FOMC justified this increase by pointing to persistent inflationary pressures and the resilience of the US labour market—two factors that, in the committee's view, provided room to tighten monetary policy without weakening the economy.

Will this hike lead to a long-term rise in the dollar?

The dollar appreciated in the hours following the announcement, but the long-term trend in the exchange rate will depend on upcoming economic data and the direction the Fed takes at its next meetings, particularly the one on 27 and 28 October 2026.

How does this decision affect an SME that pays its suppliers in dollars?

A stronger dollar increases the cost in euros of a payment made in dollars. Affected businesses should plan for their upcoming payments and consider currency hedging tools that allow them to secure an exchange rate before executing the transfer.

Should we expect further US rate hikes before the end of 2026?

Several analysts expect them, but Kevin Warsh did not publish numerical projections at this meeting, leaving uncertainty over the exact timeline. The next FOMC meeting, scheduled for late October, will be closely watched.