Fed Raises Interest Rates as Trump's Inflation Plans Falter

The Federal Reserve has raised interest rates by a quarter of a percentage point to between 3.75 and four per cent, marking its first policy shift under new chief Kevin Warsh.

This move is seen as a blow to President Donald Trump's efforts to control inflation, which has remained high due to global import tariffs, an energy shock following the start of the US-Israeli war with Iran, and capital spending from the artificial intelligence boom.

The Fed's new policy projections show 16 out of 18 policymakers anticipate at least one more quarter-percentage-point hike by the end of this year, with only two seeing rates remaining stable.