Why it is in the news
On 16 September 2026, the Federal Open Market Committee (FOMC) of the US Federal Reserve raised the target range for the federal funds rate by 25 basis points to 3.75–4.00% — its first increase since July 2023 — by a unanimous 12–0 vote. Chair Kevin Warsh said inflation is too high and has been for too long.
The exam angle
Issue: A tightening Fed amid an oil shock transmits higher global rates and a strong dollar to emerging economies such as India.