Fed Hikes Rates to Tame 'Too High' Inflation Despite Trump Opposition

The US Federal Reserve raised interest rates for the first time since 2023 on Wednesday, defying President Donald Trump's demand for rate cuts. The Fed's decision aims to combat inflation that has been 'too high' and 'for too long,' according to central bank chief Kevin Warsh.

The Federal Open Market Committee voted unanimously to raise rates by 25 basis points to between 3.75 and 4.00 percent, citing the need to tame price pressures that remain elevated and persistent. The decision may not be the last, as the majority of policymakers indicated at least one more rate hike is likely necessary before the end of the year.

The move was met with a reaction from Trump, who called it a 'raise against him' and accused the Fed's rate-setting committee of making decisions for political reasons. The president has launched an unprecedented assault on the Fed's independence since taking office, attempting to fire a Fed Governor and launching a criminal probe against Warsh's predecessor.