Fed Hikes Interest Rates Amid Stubborn Inflation
The Federal Reserve has raised its benchmark interest rate for the first time since July 2023 in an effort to combat stubborn inflation.
The Fed's Federal Open Market Committee (FOMC) voted unanimously, 12-0, to increase the federal funds rate from a range of 3.5% to 3.75% to a new target rate of 3.75% to 4%, a 25-basis-point hike.
The decision was made in response to concerns over inflation, which has been driven by higher energy prices, and the Fed's goal of achieving price stability and promoting full employment.
Fed Chair Kevin Warsh emphasized that the FOMC raised interest rates to support its dual mandate, stating 'we will deliver price stability' and noting that the labor market is strong, with a low unemployment rate of around 4.1% and rising job openings and weekly hours.