Fed Raises Rates Amid Persistent Inflation Concerns

The US Federal Reserve raised interest rates by 25 basis points on Wednesday, taking the federal funds target range to 3.75% to 4%. The decision was made in a unanimous 12-0 vote by the Federal Open Market Committee.

Fed Chair Kevin Warsh acknowledged that higher interest rates cannot directly address supply-side disruptions affecting energy prices. He emphasized that inflation remains the central bank's predominant concern, saying 'the plain fact is that inflation is too high, and has been for too long.'

The Fed's September projections show inflation cooling, growth holding up, and unemployment staying broadly stable through 2029. However, 16 of the 18 participants expect at least one additional rate increase.