Fed Raises Rates to Combat Persistent Inflation

The Federal Reserve raised its benchmark interest rate by a quarter percentage point to bring the federal funds target range to 3.75% to 4%, aiming to combat persistent inflation.

The move, which was unanimous in a 12-0 vote, is the Fed's first rate hike since 2023. This decision comes as policymakers seek to bring inflation back toward the central bank's 2% target.

Economic activity remains strong, with resilient domestic spending and robust capital investment. Job gains have kept pace with the workforce, while the unemployment rate has changed little.