Fed Hikes Interest Rates Amid Rising Inflation Concerns

The US Federal Reserve (Fed) raised interest rates for the first time in three years due to concerns over rising inflation. The decision was unanimous, with a rate hike of one-quarter point expected by markets after Fed Chair Kevin Warsh's speech last month.

Warsh highlighted 'geopolitics' as a factor that changed since the previous meeting, referring to ongoing conflicts and tensions around the world. Energy prices, including crude oil prices above $100 a barrel, are contributing to inflation.

The Fed also signaled that rates will likely continue to rise, with at least one more rate hike expected later this year and further increases in 2027. Warsh emphasized that 'price stability is fundamental to economic growth', but refused to provide guidance on future decisions.