Fed Raises Interest Rates Amid Rising Inflation and Oil Prices

The US Federal Reserve raised interest rates for the first time in three years on Wednesday, as policymakers responded to rising inflation and oil prices caused by supply disruptions in the Middle East. The Fed increased its target range to 3.75-4% by raising interest rates by 25 basis points.

Central banks in the UAE, Saudi Arabia, and Qatar followed suit by raising their interest rates shortly after the announcement. This decision comes amid high inflation, with energy prices being a major driver of price pressures remaining firm at 3.4% on an annual basis in August.

The Fed's decision also reflects its changed thinking on energy prices, which were previously seen as temporary shocks. With the Iran war ongoing and oil prices topping $100 a barrel, the central bank has adjusted its stance to address rising inflation concerns.