Fed Hikes Rates as Energy-Driven Inflation Takes Center Stage

The Federal Reserve raised interest rates for the first time in over three years to 3.75-4.00 percent, as policymakers stepped up their response to energy-driven inflation.

The decision was backed by a higher than expected CPI print, with core CPI increasing 0.3 percent month-over-month, exceeding the 0.2 percent consensus and underscoring persistent underlying inflation pressures.

The Bank of Japan followed with a split-vote hike to 1.25 percent, while the Bank of England held at 3.75 percent, despite three MPC members again backing a hike as UK inflation climbed to a five-month high of 3.1 percent.