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

The Federal Reserve has raised its benchmark interest rate for the first time in three years to combat stubbornly high inflation. The quarter-point increase brings the Fed's key rate to around 3.9%, which could lead to higher borrowing costs for mortgages, auto loans, and credit cards.

In a set of quarterly projections, the Fed also signaled that its rate-setting committee may raise the rate again later this year, potentially to 4.1%. This move comes as Americans are struggling with high prices for groceries, gas, and housing.

The decision adds another economic variable to consider in the upcoming midterm elections, just seven weeks away. President Donald Trump blasted the decision, accusing the Fed's top policymakers of trying to hurt him politically.