Federal Reserve Hikes Rates Unanimously Amid Inflation Concerns

The Federal Reserve raised interest rates by a quarter point to a range of 3.75% to 4%, in line with expectations, and for the first time since 2023. The decision was unanimous, surprising some analysts who had predicted at least one or two dissents.

According to the Bank of America, this week's Federal Open Market Committee statement explaining the decision is the most terse since 2007, consisting of just 130 words. This minimalist approach has been greeted positively by strategists, who see it as a sign of credibility and an end to 'oversharing'.

The rate hike was seen as a step towards returning to the 2% target, which inflation has consistently exceeded for over five years, with recent readings suggesting a pace trending above 3%. Federal Reserve Chairman Kevin Warsh explained that the decision was not specifically a tightening of policy but rather removing 'a bit of accommodation'.

Meanwhile, in Japan, inflation slowed slightly last month to 1.7%, still close to the 2% target set by the Bank of Japan.