Fed Raises Rates to 3.75-4 Percent, Signals Further Tightening Ahead

The Federal Reserve raised interest rates by a quarter point to 3.75-4 percent on September 16, marking its first hike since July 2023.

The decision was made in response to elevated inflation, with the committee citing that inflation remains high and that the rate hike will support a timely return to the 2 percent target.

Chairman Kevin Warsh had previously stated at Jackson Hole on August 28 that responsibility for sustained, elevated inflation sits squarely with the central bank.

The move is expected to have an impact on global markets, with the dollar seeing upward pressure and other currencies feeling downward pressure.