Fed Hikes Rates Amid Strong Growth and Inflation Concerns

The Federal Reserve raised its federal funds rate by 25 basis points on Wednesday, setting the target range at 3.75%-4.00%. Fed Chair Kevin Warsh cited stronger growth, insufficient progress on inflation, and rising geopolitical risk as reasons for the move.

The Fed's updated projections show inflation not returning fully to target until 2029, while growth and employment forecasts improved. Global bond yields eased slightly in response.

President Trump is hosting Chinese President Xi Jinping this week, with markets watching for progress on trade and investment agreements, as well as the export-control truce and Taiwan arms package.