Fed Raises Interest Rates Amid Rising Inflation and Economic Growth

The Federal Reserve has raised interest rates for the first time in six weeks, citing economic growth and rising inflation.

The rate-setting committee unanimously agreed to a hike, with nearly all policymakers signaling that another increase later this year is likely. The decision comes amid renewed fighting in the Middle East, which has pushed up gas prices again.

The Fed's rate increases are aimed at slowing borrowing and spending to cool inflation, but financial markets appear reassured by the commitment to fighting inflation. As a result, the 10-year Treasury yield slipped slightly on Thursday, indicating reduced inflation worries among investors.

Inflation, which has been stubbornly high, is now eroding Americans' take-home pay, making it harder for them to afford necessities. The Fed's decision to raise rates 'alleviates concerns around the Fed taking sticky inflation seriously,' according to Oscar Munoz, head of U.S. economic research at TD Securities.