Fed Hikes Rates Amid Iran-Driven Inflation Surge

The US Federal Reserve has raised interest rates for the first time in three years to combat persistently high inflation. The decision, widely expected by economists, aims to rein in inflation fueled by the ongoing war with Iran and its impact on energy costs.

The Fed's governing committee voted unanimously to raise the target rate by 0.25 percentage points, setting it between 3.75% and 4%. This move is seen as a bid to bring inflation back to the central bank's target of 2%, which has been above that threshold due to rising energy costs.

The war with Iran has led to increased energy prices, contributing to high inflation in the US. The price of Brent crude oil, an international benchmark, has risen above $100 a barrel following drone attacks on Saudi Arabia's East-West Pipeline and other infrastructure.

President Donald Trump had campaigned for lower interest rates, tweeting that they would put the US at a disadvantage. However, Fed Chairman Kevin Warsh and his committee have stuck to their policy of keeping inflation in check.