Fed Raises Interest Rates Amid Rising Inflation Concerns

The US Federal Reserve raised interest rates for the first time in over three years, hiking them to 3.75%-4% from 3.5%-3.75%. The decision was made despite criticism from President Donald Trump, who wanted rates cut.

Fed Chair Kevin Warsh stated that inflation is too high and has been for too long, making the rate hike a 'sober' and 'responsible decision'. However, Trump continued to express his dissatisfaction with the move, calling on the Fed to lower interest rates further, claiming the US has the best credit in the world.

The increased interest rates will make borrowing more expensive for individuals seeking loans, mortgages, or credit cards. Major US banks have already raised their prime lending rate to 7% from 6.75%, affecting rates charged on credit cards and personal loans.

Warsh emphasized that the Fed cannot control individual prices, such as oil, but can ensure price rises do not spread across the economy. He also noted that those least well off would benefit most from lower inflation.