Fed Hikes Rates, Cites Inflation Concerns Amid Economic Growth

The Federal Reserve raised interest rates by 25 basis points to a range of 3.75%-4.00% in its first hike since 2023, with Chair Kevin Warsh stating that inflation is 'the problem' despite acknowledging economic growth.

Warsh emphasized the Fed's commitment to price stability and its independence from other government policies, including those related to artificial intelligence. He noted that the policy decisions on AI are made by other parts of the government, but acknowledged that the implications of those decisions have an impact on the Fed's jobs.

The hike was unanimous and had already been priced in by markets, with Bitcoin briefly spiking before stabilizing near $75,500. The updated projections still point to one more hike before year-end, suggesting that Wednesday's move may not be the last time rate decisions affect the market.