Fed Unleashes First Rate Hike Since 2023
The US Federal Reserve raised its benchmark interest rate by 25 basis points on September 16, bringing an end to a long pause since May 2025.
This decision was expected by markets amid persistent price pressures and rising energy costs, with all 12 voting members of the Federal Open Market Committee backing the move.
The Fed's benchmark interest rate target now stands at 3.75%-4%, with policymakers aiming to bring inflation back to its 2% target.
Inflation has remained above this target for more than five years, and the latest projections suggest that controlling inflation remains the central bank's top priority.
The Fed also raised its inflation forecasts slightly, expecting headline inflation to average 3.7% this year, while core inflation is projected at 3.4%.