Fed Hikes Interest Rates Ahead of Midterms Amid Inflation Concerns
The Federal Reserve has raised interest rates for the first time in three years, with a unanimous decision taken by its new chief Kevin Warsh. This move is seen as a major setback for Donald Trump ahead of the November midterms.
The benchmark overnight interest rate was raised by a quarter of a percentage point to the 3.75%-4.00% range. The updated quarterly economic projections show that 16 out of 18 Fed policymakers anticipate at least one more quarter-percentage-point hike by 2026.
Fed boss Kevin Warsh attributed the need for tighter monetary policy to an economy that is picking up speed, with strong economic and job growth adding to price pressures. 'There's been a pretty wide-ranging set of data, including the labour market, indicating that the economy has strengthened,' he said.