Federal Reserve Raises Interest Rates for First Time Since 2023
The Fed unanimously hiked its benchmark rate by 25 basis points to 3.75%-4%, its first increase in nearly two years.
The Federal Reserve raised its benchmark interest rate Wednesday for the first time since July 2023, a unanimous decision by the central bank's open market committee to lift borrowing costs by a quarter-percentage point to a target range of 3.75% to 4%.
The move signals renewed urgency at the Fed to contain persistent inflation, resuming a tightening cycle that had been on pause for roughly two years. The committee's unanimous vote suggests broad internal consensus that price pressures remain elevated enough to warrant action despite the risks of cooling economic growth.
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The decision places Fed Chair Kevin Warsh on a potential collision course with President Donald Trump, who has historically pressured the central bank to keep rates low. Trump has been openly critical of rate increases, and a fresh hike could reignite tensions between the White House and the Fed's leadership at a politically sensitive moment.
Warsh, who now leads the institution, inherits a delicate balancing act: tightening monetary policy aggressively enough to restore price stability without triggering a broader economic slowdown. The quarter-point increment suggests the committee is proceeding cautiously, leaving room to adjust further depending on incoming economic data.
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