Fed Hikes Rates Amid Oil Price Spikes

The US Federal Reserve raised its benchmark interest rate by 25 basis points to 4% on Wednesday, marking the first increase in three years.

The decision comes as a response to rising inflation fears, driven by the ongoing Iran-US war and subsequent disruptions to global oil supplies.

Crude oil prices have soared due to the near-total closure of the Strait of Hormuz, with futures contracts for WTI crude trading as high as $106.50 and Brent crude at $109.

The Federal Reserve aims to return inflation to its 2% goal, citing a strong labour market and robust productivity as reasons for optimism.