What Happened in the Markets Last Week

Week ended Friday, September 18, 2026   |   Prepared Sunday, September 20, 2026

THE SHORT VERSION

The Federal Reserve raised interest rates for the first time in three years. Borrowing gets a little more expensive. Saving gets a little better.

The Fed also signaled it may raise rates again before the end of the year.

The stock market did not react much either way. Some parts went up, some went down.

Gas and energy prices are still the main thing pushing costs up, and that is not fixed yet.

Nothing here asks you to do anything today.

 First, what the Fed actually did

On Wednesday, the Federal Reserve raised its interest rate by a quarter of a percent. The new range is 3.75 to 4.00 percent. Every voting member agreed. (1)

That sounds technical, so here is the plain version. The Federal Reserve sets the rate that banks charge each other to borrow money overnight. That rate ripples outward into almost everything else: your credit card, your car loan, your savings account, your mortgage. When the Fed raises it, borrowing money gets more expensive and saving money pays a little more.

This is the first increase since July 2023. For most of the past few years, the conversation was about when rates would come down. That conversation has changed. (1)

The Fed also publishes what its officials expect to happen next. Most of them expect at least one more increase before the end of the year. (2) The next meeting is October 27 and 28. (3)

Why they did it

Prices are still rising faster than the Fed wants. Its target is 2 percent a year. Inflation has been running above that, and a big reason is energy.

Fed Chair Kevin Warsh made a point at his press conference that is worth repeating. The Federal Reserve cannot lower the price of oil or groceries. It has no control over those. What it can try to do is keep a jump in one or two prices from spreading into everything else. (4)

Raising interest rates is the main tool it has. It works by slowing spending down. That is the trade off, and it is the reason these decisions are uncomfortable.

What this means for the money in your life

This is the part most people actually want, so here it is directly.

Credit cards and other short term borrowing.  These usually follow the Fed closely. If the Fed raises rates, the interest on a credit card balance tends to go up within a billing cycle or two.

Mortgages.  These do not follow the Fed directly, which surprises a lot of people. Mortgages tend to track something called the 10 year Treasury yield, which is a separate rate set by the bond market. That rate is currently near 5 percent, which is high compared to recent years. (5) So if you are watching one number for the cost of a home loan, that is the number, not the Fed's.

Savings and CDs.  Higher rates generally mean banks pay a little more on savings accounts, money market accounts and certificates of deposit. The increase is usually not immediate, and not every bank passes it along at the same speed.

Investments.  Rising rates tend to make investors more cautious, because safer options start paying more. That can show up as choppier markets.

The stock market had a strange week

Different parts of the market went in different directions.

Technology stocks finished the week up. The Nasdaq, which is heavy on technology, gained about 0.7 percent. The S&P 500, which is broader, ended about where it started. The Dow, which leans toward older and more traditional companies, fell about 1.7 percent. (6)

You may hear someone say the market was up last week, and someone else say it was down. Both can be true depending on which index they are looking at. That is a good reminder that the market is not one thing.

Why prices still feel high

Energy is the short answer.

There is a conflict in the Middle East affecting oil supply. A major Saudi pipeline was damaged and is still being repaired, and it turned out more of it was damaged than first thought. Saudi Arabia's oil company has told at least two European customers they will not get any crude next month. (7)

You can see the result at the pump. The national average price of gas was 4.48 dollars a gallon, up about 52 percent since the end of February. (8)

People have noticed. A widely followed survey of how consumers feel about the economy came in at nearly the lowest level it has ever recorded, and the people surveyed said they expect prices to rise about 4.6 percent over the next year. (9)

Housing is feeling it too. Homebuilder confidence dropped again in September, and builders pointed to fewer buyers coming through the door because of higher mortgage rates. (10)

Not everything is bad news

Two reports last week pointed the other way, and they matter.

People are still shopping. Retail sales rose 1.2 percent in August, more than expected. (11) And fewer people filed for unemployment benefits than the week before. (12)

So the picture is not an economy falling apart. It is an economy that is still working while prices stay uncomfortably high. That combination is actually why the Fed feels free to raise rates. If people stopped spending and jobs started disappearing, the Fed would have a harder decision to make.

This week

There is not much scheduled. No major reports on inflation or jobs.

What there is instead is a lot of Federal Reserve officials giving speeches, at least ten of them. (13) People will listen for hints about whether another increase is coming in October. Those are opinions, not decisions, and they often disagree with each other.

One update worth noting comes Friday, when that consumer survey gets its final reading for September. (14)

Five things worth checking

None of these are urgent. They are just sensible to look at when rates are moving.

▪        What you are paying on any credit card balance. This is the debt most directly affected by what the Fed did.

▪        What your savings is earning. If cash has been sitting in an account paying almost nothing, it may be worth knowing what it could be earning instead. This matters especially if you are holding a large amount after a divorce, a business sale, a severance package or an inheritance.

▪        What you actually own in your investment accounts. Given how differently parts of the market behaved last week, an account concentrated in one area may have had a very different week from the headlines. Spreading investments across different types of holdings can reduce how much any single outcome affects you. It does not remove risk, and in a bad market many things can fall at the same time.

▪       Your household budget. Fuel and utility costs show up there long before they show up in an investment statement.

▪        Anything big already on your calendar. If a home purchase, a loan, or a tax decision is coming up, it is worth looking at the timing, the cost, and your other options in light of your own situation. Talk to your tax professional about anything tax related.

Where these numbers come from

Each figure above is numbered so you can see exactly where it came from.

(1) Federal Reserve rate increase to a target range of 3.75 to 4.00 percent, unanimous 12 to 0 vote, first increase since July 2023. CNBC and Fox Business, September 16, 2026.

(2) Federal Reserve participants' projections: 16 of 18 expected another increase this year, with a median year end rate of 4.1 percent. CNBC, September 16, 2026. Projections are individual estimates, not commitments.

(3) Next scheduled Federal Open Market Committee meeting, October 27 and 28, 2026. Federal Reserve published meeting calendar.

(4) Chair Kevin Warsh's press conference remarks, paraphrased. CNBC, September 16, 2026.

(5) 10 year Treasury yield hovering near 5 percent after rising five basis points on Friday. Yahoo Finance, September 18, 2026.

(6) Weekly index moves: Nasdaq Composite up about 0.7 percent, S&P 500 down about 0.1 percent, Dow Jones Industrial Average down about 1.7 percent. Investrade market review, September 18, 2026.

(7) Damage to three pumping stations on Saudi Arabia's East to West pipeline, and Saudi Aramco notifying at least two European refining customers of no crude next month. Trading Economics, September 18, 2026, citing satellite imagery and industry sources.

(8) National average gasoline price of 4.48 dollars a gallon, up about 52 percent since the end of February. Economic Weekly summary, September 18, 2026.

(9) University of Michigan preliminary September consumer sentiment reading of 47.8, described as the second lowest on record, with year ahead inflation expectations of 4.6 percent. Kiplinger, September 18, 2026.

(10) National Association of Home Builders and Wells Fargo Housing Market Index down three points to 32 in September. Economic Weekly, September 18, 2026.

(11) Advance August retail and food services sales up 1.2 percent from July to 773.9 billion dollars, above a consensus expectation of 0.9 percent. US Census Bureau advance report released September 16, 2026; consensus expectation per Economic Weekly, September 18, 2026. Advance estimates are preliminary and subject to revision.

(12) Initial jobless claims of 196,000 for the week ended September 12, down 10,000 from the prior week. US Department of Labor weekly claims release.

(13) At least ten scheduled appearances by Federal Reserve officials during the week of September 21. Kiplinger, September 18, 2026.

(14) Final University of Michigan consumer sentiment reading for September, scheduled for Friday, September 25. Economic Weekly and Kiplinger, September 18, 2026.

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