Federal Reserve Hikes Interest Rates Amid Ongoing Iran War-Driven Inflation

The Federal Reserve raised interest rates for the first time since July 2023 in an effort to combat inflation caused by the Iran war.

The central bank increased its benchmark rate by a quarter of a percentage point, setting interest rates between 3.75% and 4%. This marks a significant drop from the peak achieved in 2023 but still keeps borrowing costs above the 0% rate set at the beginning of the COVID-19 pandemic.

Fed Chair Kevin Warsh emphasized the need to contain inflation, stating that 'the plain fact is that inflation is too high and has been for too long.'