Fed Unanimously Hikes Rates Amid Worsening Inflation Fears

The Federal Reserve's (Fed) monetary policy committee met on September 15-16 and delivered a widely anticipated 25bps increase in the federal funds rate (FFR), raising the target range to 3.75%-4.00%.

This decision was unanimous, with all 12 members voting in favor of the rate hike. Fed Chair Kevin Warsh emphasized that the vote shows the Committee's resolve to achieve price stability on a timelier basis.

The Committee cited three key developments since July that contributed to their decision: stronger economic growth, insufficient improvement in inflation, and increased geopolitical risks. Notably, the re-escalation of the war in the Middle East and the resulting prospect of higher oil prices were seen as major factors.