Written by Stina Antonopoulos
Founder of Roots & Wealth | Retirement Income Planning | Author of What If? (Coming August 2026)

Quick Answer

The Federal Reserve raised its target interest rate by 0.25 percentage point on September 16, 2026, bringing the federal funds target range to 3.75%–4.00%. The Fed said inflation remains elevated and that the increase is intended to support a return toward its 2% inflation goal.

For retirement savers, higher interest rates can help support attractive rates on CDs, fixed annuities, MYGAs and other interest-sensitive products.

But here's the important part:

A Fed rate hike does not mean CD or annuity rates will automatically increase by the same amount—or increase at all.

And it doesn't necessarily mean you should wait for a better rate.

The more useful question is still:

What do you need this money to do?

The Fed Raised Rates. Why?

After months of speculation about the direction of interest rates, the Federal Reserve made its move.

At its September 15–16 meeting, the Federal Open Market Committee voted unanimously to raise the federal funds target range by a quarter percentage point to 3.75%–4.00%.

The reason was straightforward: inflation remains too high.

The Fed described economic activity as expanding at a solid pace, with resilient domestic spending, strong productivity growth and robust capital investment. At the same time, inflation remains elevated.

The Fed's latest projections put 2026 PCE inflation at 3.7% and core PCE inflation at 3.4%, both well above its longer-run 2% objective.

For retirees, that's particularly important.

Someone retiring at 65 could potentially spend 20, 30 or more years in retirement. Inflation doesn't just affect what groceries cost this month. Over time, it can significantly change the amount of income needed to maintain the same lifestyle.

What Does the Fed Rate Hike Mean for CD Rates?

When the Fed raises short-term rates, yields on certain savings products may receive support.

That can include:

Certificates of deposit (CDs)

Money-market accounts

High-yield savings accounts

Treasury securities

But here's where I don't want retirees making an assumption:

The Fed raised rates 0.25%. That does NOT mean your bank will raise its CD rates by 0.25%.

Banks determine CD rates based on several factors, including their need for deposits, competition, Treasury yields, market conditions and expectations about future interest rates.

Financial markets also anticipate Federal Reserve decisions.

That means some of the movement in interest rates and bond yields can occur before the Fed announces its decision.

So don't assume today's Fed announcement automatically means tomorrow's CD rates will be higher.

What Could the Rate Hike Mean for Fixed Annuity Rates?

This is where the decision becomes particularly interesting for people approaching or already in retirement.

Interest rates influence the environment in which insurance companies price certain annuity products.

When insurers can earn higher yields on bonds and other fixed-income assets supporting their general accounts, that can help support competitive rates on products such as:

Traditional fixed annuities

Multi-Year Guaranteed Annuities (MYGAs)

Certain fixed indexed annuity crediting strategies

But once again:

Annuity rates do not move directly with the federal funds rate.

Insurance companies consider market yields, their investment portfolios, product design, expenses, hedging costs, competitive conditions and the length of the guarantees being offered.

So today's rate hike may support the overall rate environment without producing an immediate 0.25% increase in a particular annuity rate.

That's an important distinction.

Could Rates Go Even Higher?

Possibly.

And this may be more important than today's rate increase itself.

The Fed's September economic projections show policymakers expecting a higher federal funds rate path than they projected in June. The median projection for the federal funds rate at the end of 2026 is now 4.1%, compared with 3.8% in the June projections.

Reuters reported that Fed policymakers' projections point toward another rate increase this year, although projections are not promises and future decisions will depend on economic conditions.

So yes, rates could move higher.

But they could also change direction as inflation, employment, economic growth and geopolitical conditions evolve.

Which brings us to the question I'm already hearing:

"Should I Wait?"

Maybe.

But don't automatically assume that waiting is the smart move.

Suppose you have $100,000 sitting in cash because you're waiting for another Fed increase.

What happens if rates rise another quarter point?

You may benefit.

But what if the annuity or CD market has already anticipated that increase?

What if a particular carrier lowers its rate for reasons unrelated to the Fed?

What if rates peak before you act?

Or what if the Fed's outlook changes?

Waiting for higher rates is still an interest-rate decision.

Trying to capture the absolute highest rate is another form of timing the market.

And consistently identifying the top in advance is extremely difficult.

CD or Fixed Annuity: What's the Difference?

A CD and a fixed annuity can look similar on the surface because both may offer a stated interest rate for a specific period.

But they aren't the same financial tool.

A CD

A certificate of deposit is a bank deposit product.

CD deposits at an FDIC-insured institution are generally eligible for FDIC insurance within applicable ownership categories, limits and requirements.

A Fixed Annuity

A fixed annuity is an insurance contract.

Depending on the particular contract, it may offer:

Tax-deferred accumulation

A guaranteed interest rate for a stated period

Various withdrawal provisions

Income options

Potential lifetime-income features

Annuities may also have:

Surrender periods

Withdrawal restrictions

Market value adjustments

Fees or other contract provisions, depending on the product

And an annuity is not FDIC-insured.

Its contractual guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

Neither automatically wins.

They have different characteristics and can perform different jobs.

Don't Chase the Rate. Identify the Job.

This is the part of the conversation I believe gets overlooked.

When people see:

5%

5.5%

6%

the natural reaction is:

"Which one pays the most?"

I think there's a question that needs to come first:

"What job does this money need to do?"

At Roots & Wealth Group, that's one of the fundamental principles I teach:

Every retirement dollar deserves one clear job.

Money intended for emergencies probably needs to remain highly liquid.

Money you won't need for several years may have a different job.

Money intended to create your retirement paycheck has another job.

And money intended for long-term growth or legacy may have a completely different purpose.

Once you know the job, you can begin comparing which financial tools may be appropriate for accomplishing it.

Rate matters. Purpose matters more.

What Should Retirees Watch Next?

Don't obsess over every Fed headline.

But do pay attention to the bigger picture.

Watch:

Inflation

Employment

Economic growth

Treasury yields

Future Federal Reserve guidance

CD rates

Fixed-annuity and MYGA rates

The next scheduled FOMC meeting is October 27–28, 2026, followed by another meeting December 8–9.

But I wouldn't build a retirement strategy around guessing what happens at either meeting.

Your retirement may last decades.

During that time:

Interest rates will rise and fall.

Markets will rise and fall.

Inflation will change.

Tax laws may change.

Your health may change.

And your family's needs may change.

Your retirement strategy needs to be able to adapt to more than one possible future.

The Bottom Line

The Fed raised rates on September 16.

That's news.

But it isn't a retirement strategy.

Today's increase may help support attractive yields for savers and could influence the rate environment for CDs, fixed annuities and MYGAs.

But that doesn't mean you should automatically rush to lock in today's rates.

And it doesn't mean you should automatically wait for something better.

Before making either decision, ask:

What does this money need to accomplish?

When will I need it?

How much liquidity do I need?

Is its job income, emergencies, growth or legacy?

Then compare the available options based on that purpose.

Because the Fed's decision matters.

But what your money needs to do for you matters much more.

Frequently Asked Questions

Did the Federal Reserve raise interest rates on September 16, 2026?

Yes. The Federal Reserve raised the target range for the federal funds rate by 0.25 percentage point to 3.75%–4.00% on September 16, 2026. The FOMC approved the decision unanimously.

Why did the Fed raise rates?

The Federal Reserve said inflation remains elevated and that the rate increase is intended to support a return toward its 2% inflation goal. It also characterized economic activity as expanding at a solid pace.

Will CD rates increase after the Fed's September rate hike?

Not necessarily. A Fed increase can support higher short-term interest rates, but individual banks determine CD rates based on competition, funding needs, Treasury yields, market conditions and expectations for future interest rates.

Will fixed annuity rates increase now?

Not automatically. Higher market yields can help support fixed-annuity pricing, but insurance companies establish their rates based on multiple factors. Annuity rates can therefore move differently from the federal funds rate.

Will the Fed raise rates again in 2026?

It is possible, but not certain. The September projections show a median year-end federal funds rate of 4.1%, higher than the current target range and higher than the Fed's June projection. Those projections can change as new economic data arrive.

Is a CD safer than an annuity?

They have different protections. Eligible deposits at FDIC-insured banks are covered by federal deposit insurance subject to applicable limits and requirements. Annuities are insurance contracts and are not FDIC-insured. Their contractual guarantees depend on the financial strength and claims-paying ability of the issuing insurer.

What is a MYGA?

A Multi-Year Guaranteed Annuity (MYGA) is a type of fixed annuity that generally provides a guaranteed interest rate for a specified period. Unlike a CD, it is an insurance contract and may have surrender charges, withdrawal restrictions, market value adjustments or other contract provisions.

Should I wait for another Fed rate hike before locking in a CD or annuity?

There is no universal answer. Waiting could result in a better rate, but rates could also remain unchanged or move lower. Your liquidity needs, time horizon, purpose for the money and overall retirement strategy should be considered rather than trying to identify the exact peak in rates.

Ready to Take the Next Step?

Retirement isn't just about numbers. It's about the life you've worked so hard to build.

Whether your dream is traveling more, spending time with your grandchildren, supporting the causes you care about, or simply enjoying the peace of knowing your bills are covered, your financial decisions today can shape the future you envision.

I believe every family deserves honest guidance, thoughtful education, and a retirement strategy built around their unique goals—not a one-size-fits-all recommendation.

Throughout my career, I've had the privilege of helping individuals and families navigate important financial decisions involving retirement income, life insurance, annuities, mortgages, and real estate. One thing I've learned is that every family's story is different, and every retirement plan should be too.

Before we ever talk about products or strategies, I want to understand you.

What does financial freedom mean to you? What are your biggest concerns? What kind of legacy do you hope to leave? Those conversations are the foundation of every recommendation I make because the best plans begin with listening.

My role isn't to tell you what to do. My role is to educate you, simplify complex financial decisions, and help you feel confident in the choices you make for yourself and your family.

Whether you're just beginning to plan for retirement or looking for a second opinion on your current strategy, I'd be honored to be a resource for you.

Why "Roots & Wealth"?

When I chose the name Roots & Wealth, it wasn't just because it sounded good. It reflects what I believe financial planning should be.

Just like a strong tree, lasting financial security begins with strong roots.

Those roots are built through education, thoughtful planning, meaningful conversations, and decisions that align with your values. Wealth isn't only about the size of your portfolio—it's about having choices, creating stability, protecting the people you love, and living with confidence.

Life will bring changing seasons. Markets will rise and fall. Tax laws will change. Unexpected challenges will happen. But when your financial foundation is built on strong roots, you're in a better position to weather those changes and continue growing.

That's the philosophy behind everything I do.

My goal is to help you build a retirement strategy that's deeply rooted in what matters most to you, so you can enjoy today while creating a lasting legacy for tomorrow.

If you're ready to build a retirement strategy with confidence and clarity, I'd love the opportunity to meet you. Schedule your complimentary Retirement Strategy Consultation and let's start growing your Roots & Wealth together.

Educational Disclosure

This article is for educational purposes only and is not financial, tax, or legal advice. Annuity products are insurance contracts. Guarantees are backed by the claims-paying ability of the issuing insurance company. Product availability, rates, surrender schedules, withdrawal provisions, riders, caps, participation rates, spreads, and other terms vary by carrier and state. Withdrawals may be subject to surrender charges, taxes, and, if taken before age 59½, potential IRS penalties. Fixed index annuities are not stock market investments and do not directly participate in any stock or equity index. You should review your personal situation with a qualified professional before making a decision.