Fed Hikes Interest Rates to Combat Stubborn Inflation

The Federal Reserve announced a 0.25% interest rate hike on Sept. 16, raising its benchmark interest rate into the 3.75% to 4% range.

This is the central bank's first rate hike since July 2023, driven by stubborn inflation.

New Fed Chairman Kevin Warsh said after the announcement that 'the plain fact is that inflation is too high, and has been for too long.'

The rate hike aims to address inflation, with the goal of cooling consumer spending.

Mortgage rates have reached their highest level since July 2025, with the average 30-year fixed mortgage rate sitting at 6.76% during the week of the Fed meeting, Freddie Mac reported.