Fed Nudges Bank Borrowing Rates Up a Smidge—Zzz
Published Date: 9/30/2026
Rule
Summary
Starting September 17, 2026, the Federal Reserve raised the main loan interest rate for banks from 3.75% to 4.00%, and the backup loan rate went up from 4.25% to 4.50%. This change affects banks borrowing short-term money from the Fed and aims to keep the financial system steady. The new rates officially kicked in on September 30, 2026, so banks should plan accordingly.
Analyzed Economic Effects
3 provisions identified: 0 benefits, 3 costs, 0 mixed.
Primary credit rate raised to 4.00%
If your bank borrows short-term money from a Federal Reserve Bank under the primary credit program, the interest rate increased from 3.75% to 4.00%. The Board voted on September 16, 2026 to approve the 0.25 percentage point increase, and the rate change was applicable on September 17, 2026 (regulation effective September 30, 2026).
Secondary credit rate rose to 4.50%
The interest rate for secondary credit at each Federal Reserve Bank increased from 4.25% to 4.50% because it is set by formula as the primary credit rate plus 50 basis points. The Board approved the primary rate increase on September 16, 2026; the secondary rate change was applicable on September 17, 2026 and reflected in Regulation A effective September 30, 2026.
Federal funds target range raised 25 basis points
The Federal Open Market Committee raised the target range for the federal funds rate by 0.25 percentage points from 3.50%–3.75% to 3.75%–4.00%; the Board states the primary credit increase was associated with this change announced on September 16, 2026. The Board amended Regulation A to reflect the related primary and secondary credit rate changes (applicable September 17, 2026; rule effective September 30, 2026).
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Key Dates
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