Fed Raises Rates to Tackle 'Too High' Inflation Despite Trump Opposition

The US Federal Reserve raised interest rates for the first time since 2023, defying President Donald Trump's demand for rate cuts. The Fed's decision to hike rates by 25 basis points is aimed at tackling 'too high' inflation, according to central bank chief Kevin Warsh.

In his press conference, Warsh emphasized that inflation has been a persistent issue and that the rate hike was necessary to combat it. He noted that while the economy remains resilient, tighter financial conditions are needed to control price pressures.

The Fed's Summary of Economic Projections (SEP) showed that at least 12 policymakers expect one more rate hike before the end of the year, with four expecting two hikes. The decision to raise rates comes as the US economy faces challenges from higher-than-target inflation and the ongoing impact of Trump's war on Iran.