US Fed Defies Trump with Rate Hike to Combat Inflation

The US Federal Reserve raised interest rates for the first time since 2023 on Wednesday, defying President Donald Trump's demand for cuts. Central bank chief Kevin Warsh emphasized the need to combat inflation that has been 'too high' for 'too long.'

Warsh said the decision was a 'serious' one and necessary: 'The plain fact is that inflation is too high, and has been for too long.' The Fed's Federal Open Market Committee voted unanimously to raise rates by 25 basis points to between 3.75 and 4.00 percent.

The rate hike aims to support a 'timelier return' to the two-percent target for inflation. However, it may not be the last, a majority of Fed policymakers indicated that at least one more rate hike is likely necessary before the end of the year.