Fed Hikes Rates in Bid to Tame Inflation

The Federal Reserve raised its benchmark interest rate to 3.75%-4.00% on Wednesday, marking the first increase in three years and signaling more tightening ahead.

According to new projections, the policy rate will rise to the 4.00%-4.25% range by the end of 2026 and 2027.

The move was unanimous, with all but one policymaker indicating they see upside risks to inflation that are no longer largely attributed to one-off supply shocks.

New Fed chief Kevin Warsh attributed the need for tighter monetary policy in part to an economy he sees as picking up speed, with strong economic and job growth adding to price pressures.