Fed Raises Rates as Strong Economy Fuels Inflation Concerns

The US Federal Reserve has raised interest rates for the first time in three years. The move comes as the central bank cites inflation and a strong economy as reasons for the increase.

Fed Chair Kevin Warsh announced that the target range would rise from 3.5%, 3.75% to 3.75%, 4%, effective immediately. Economists and investors widely expected this decision, which is seen as a major shift for the world's largest economy.

The increase in interest rates means it will be more expensive to borrow money, potentially slowing spending and reducing inflation. Warsh refused to comment on future rate hikes, saying 'I'm not in the forward guidance business.'