Fed Hikes Rates Amid Inflation and Oil Price Pressures

The Federal Reserve raised interest rates by 0.25 percentage points to a range of 3.75% to 4%, marking its second increase in as many meetings, according to a decision made on September 16.

The move comes as inflation remains above the central bank's 2% target, with the PCE index projected to reach 3.7% by 2026 and returning to 2% by 2029.

The increase was unanimous among the 12 members of the Federal Open Market Committee, led by new Chair Kevin Warsh, appointed by President Donald Trump in May to succeed Jerome Powell.

Warsh defended the decision, stating it was based on economic conditions and aimed at controlling rising prices. He emphasized that the US economy remains relatively strong and can focus on managing inflation.