Fed Hikes Interest Rate Amid Inflation Fears
The U.S. Federal Reserve has raised its benchmark interest rate by 0.25 percentage points to a range of 3.75%-4%, in an effort to combat persistent inflationary pressures in the economy.
The decision, made under the leadership of new Fed chair Kevin Warsh, was unanimous and comes as the U.S. struggles with high tariffs, energy costs, and investment in artificial intelligence.
According to projections, 16 of the 18 members of the monetary policy committee anticipate at least one more interest rate increase by the end of the year, with rates expected to reach between 4% and 4.25% and remain at a similar level in 2027.
The Fed also revised its estimate for U.S. economic growth upwards to 2.3%, and anticipates an unemployment rate of 4.1% by the end of the year.