Fed Raises Interest Rates for First Time in Over Three Years

The United States Federal Reserve has raised interest rates for the first time in over three years. The target range was lifted by a quarter of a percentage point to between 3.75 and 4 per cent. This decision, made on September 16, was unanimous.

Fed Chairman Kevin Warsh said that inflation remained elevated and that the increase would bring it back to the 2 per cent target more promptly. He also mentioned that the summer's inflation readings did not show that underlying price trends had 'meaningfully improved'.

The previous US rate rise was in July 2023, and this new decision comes as the war between the United States and Iran is pushing up energy costs. West Texas Intermediate crude, the American benchmark, is trading above $100 a barrel.