Fed Hikes Interest Rate for First Time in Over Three Years
The US Federal Reserve has increased its benchmark interest rate for the first time in over three years. The decision was made during a two-day policy meeting that concluded on Wednesday, with all 12 voting members in favor of the move.
The Fed raised its benchmark interest rate by 0.25 percentage points, setting it in a target range of 3.75 percent to 4 percent. This marks the first time the rate has been increased since July 2023.
The Fed's decision was motivated by concerns over inflation, which is currently 'elevated.' The policymakers noted that the price of oil has been driven up due to the situation in Iran, and they believe that raising interest rates will help bring inflation back down to their target range of 2 percent more quickly.
US Federal Reserve Chair Kevin Warsh stated: 'We must be confident that underlying inflation is moving to our objective, clearly and at sufficient speed. Today, the FOMC decided that this standard has not been satisfied.'