Fed Raises Rates to Tackle 'Too High' Inflation as Trump Objects

The US Federal Reserve raised interest rates for the first time since 2023 in an effort to combat high inflation, which has been above target for too long. The Fed's Federal Open Market Committee voted unanimously to increase rates by 25 basis points to between 3.75 and 4.00 percent.

Central bank chief Kevin Warsh emphasized the need for tighter policy to tackle inflation, saying 'the plain fact is that inflation is too high, and has been for too long.'

The decision may not be the last, as a majority of Fed policymakers indicated at least one more rate hike was necessary before the end of the year.

US households and businesses have struggled with years of higher-than-target inflation, exacerbated by President Donald Trump's policies and the ongoing AI boom.

Trump reacted angrily to the decision, calling it a 'raise against Trump' and accusing the Fed's rate-setting committee of making decisions for political reasons.