Fed Raises Key Rate for First Time in Three Years

The US Federal Reserve took a hawkish turn on inflation by raising its key interest rate for the first time in three years. The quarter of a percentage point increase brings the target range to 3.75%-4.00%. This move could lead to higher borrowing costs for mortgages, auto loans, and credit cards.

The Fed also signaled that its rate-setting committee might raise the rate again to 4.1% in a second hike. Despite this, US stock market indices mostly declined following the announcement, but futures are looking to recover some ground on Thursday. S&P 500 futures rose 0.8%, while Dow Jones Industrial Average futures gained 0.7%. Nasdaq futures climbed 1.1%.