Fed Hikes Interest Rates Amid Inflation Worries

The Federal Reserve has raised interest rates for the first time in three years to combat inflation. The move, which was widely expected by economists and traders, brings borrowing costs up for Americans just ahead of the midterm elections.

In a unanimous vote, the Fed increased rates by a quarter point to between 3.75% and 4%, with Federal Reserve Chair Kevin Warsh citing the need for price stability.

Economists have warned that higher interest rates will raise borrowing costs on mortgages, auto loans, and credit cards, hitting consumers who are already struggling with high housing prices and gasoline prices.