Federal Reserve Raises Interest Rates for First Time in Three Years

The Federal Reserve announced its first interest rate hike in three years today. The decision to raise rates by a quarter-of-a-point was made unanimously, and it comes as the war in Iran continues to put pressure on prices. Fed Chair Kevin Warsh explained that the committee voted to raise rates because of the underlying strength of the economy and the need to ensure stable prices.

According to Julia Coronado, an economist at the University of Texas at Austin, this decision is a reassuring sign that the Fed is independent from politics. She noted that President Trump has long pressured the Central Bank and Warsh's predecessor to lower interest rates, but Warsh has demonstrated his commitment to fighting inflation.

Coronado also predicted that there will be more rate hikes ahead, likely at the December meeting. The 10-year Treasury has passed 5 percent, which is a reflection of the Fed's efforts to slow down the economy and combat elevated inflation.