Fed Hikes Rates for First Time in Three Years Amid Elevated Inflation

The Federal Reserve has made its first rate hike in three years, raising its policy rate to 3.75% to 4%. This decision comes after weeks of speculation and was unanimous with a 12-0 vote.

The central bank cited 'elevated inflation' as the reason for the increase, which marks the first hike since July 2023 when it reset the benchmark to its highest level in 22 years.

Fed Chair Kevin Warsh had hinted at a rate hike last month at the Jackson Hole Economic Policy Symposium, stating that elevated inflation could force the Fed's hand on further hikes.