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

The Federal Reserve raised interest rates for the first time in three years to combat persistent inflation. The quarter-point hike brings the benchmark overnight rate to a range of 3.75 to 4 percent.

New Fed chief Kevin Warsh, who took office in late May, attributed the decision to an economy that is picking up speed with strong growth and job gains contributing to price pressures.

The move was unanimous, with 16 out of 18 policymakers anticipating at least one more quarter-percentage-point hike by year's end. Two officials expect rates to remain stable. The Fed dropped its previous reference attributing current elevated inflation to 'supply shocks,' particularly in the energy sector.