Federal Reserve Defies Trump with Interest Rate Hike

The US Federal Reserve on Wednesday raised interest rates by 25 basis points to between 3.75 and 4.00 per cent, defying President Donald Trump's demands for lower rates.

This move comes as inflation has been above the Fed's two-per cent target for more than five years, with US households and businesses battered by high prices since the pandemic.

Fed Chair Kevin Warsh delivered the interest rate hike, which was supported by a unanimous vote from the Federal Open Market Committee (FOMC).

Warsh has made it clear that he prioritized tackling stubbornly high inflation, and despite Trump's assertion that he gave him permission to vote for the hike, many economists question Warsh's independence.