Fed Hikes Interest Rates by 0.25 Percent to Combat Elevated Inflation

The US Federal Reserve has raised interest rates for the first time in three years by a quarter of a percentage point, aiming to combat elevated inflation.

The rate hike brings the target range to 3.75 percent to 4 percent, with the central bank citing that inflation remains 'elevated' and this move will help bring it closer to its 2 percent target sooner.

The Federal Open Market Committee (FOMC) voted unanimously for the increase, which is part of a broader effort by the US central bank to control inflation. The Fed expects to raise interest rates again before the end of the year and has also raised its forecasts for inflation and economic growth for the current year.

This decision marks a shift in the Fed's monetary policy stance, as it seeks to balance economic growth with price stability. While the rate hike is relatively small, it signals that the Fed is taking steps to address rising inflation concerns.