Fed Raises Interest Rates Amid Ongoing Inflation Concerns

The United States Federal Reserve has raised its benchmark interest rate by 0.25 percentage point for the first time since July 2023, bringing the federal funds rate target to a range of 3.75 percent to 4 percent.

This decision was made unanimously by the Federal Open Market Committee (FOMC), which sets the direction of Fed monetary policy. The increase in interest rates is aimed at accelerating the return of inflation to the 2 percent target, as the US central bank signaled that there's still a chance of further hikes this year.

The war in Iran has pushed up energy prices and consumer goods, contributing to high inflation, which has been above the target for more than five years. The Fed also updated its economic projections, with the median inflation projection rising to 3.7 percent from 3.6 percent in June.