Fed Raises Interest Rates, Targets 2% Inflation Amid Economic Uncertainty

The Federal Reserve raised interest rates last week for the first time since 2023, increasing its target range by a quarter point to 3.75%-4.00%.

This decision marks a significant shift in the Fed's approach to inflation, which was previously framed as a supply-shock story.

However, the latest statement from the Fed emphasizes that 'inflation remains elevated' and commits to achieving a 'timelier return' to 2%.

The median policymaker now expects the federal funds rate to end 2026 at 4.1%, up from 3.8% in June, indicating further rate increases are on the horizon.