Fed Raises Interest Rate Amid Inflation Fears and AI Worries

The U.S. Federal Reserve has raised its interest rate for the first time in over three years as part of a renewed effort to combat inflation, which has worsened since the beginning of the year due to the conflict with Iran.

The benchmark lending rate was increased by a quarter of a percentage point, setting it at 3.75-4%. This move reverses one of last year's three interest rate cuts.

The decision came after several months of turmoil in the Middle East, which has led to fluctuations in energy prices and may make inflation more persistent and widespread.

Fed officials are also concerned about the potential inflationary impact of large-scale development of artificial intelligence technologies.