US Fed Hikes Interest Rates Amid Soaring Fuel Prices

The US Federal Reserve has raised interest rates for the first time in three years to combat inflation. The 25 basis-point hike brings the target range to 3.75 percent to 4 percent.

This decision comes as fuel prices continue to soar amid the US-Iran war, driving up inflation. Consumer prices rose 0.4 percent in August, the highest increase in four months, while annual prices grew 3.4 percent. The job market remains healthy, but rising oil prices are expected to further stoke costs.

The Fed's decision is a departure from repeated demands by US President Donald Trump to lower interest rates. However, with inflation exceeding the target of 2 percent, the Fed aims to support a return to this goal through its monetary policy action.