US Fed Hikes Interest Rates for First Time Since 2023

The US Federal Reserve has raised its benchmark interest rate by 25 basis points, marking its first increase since 2023. The federal funds target range now stands at 3.75%-4%. This decision comes as policymakers continue to grapple with inflation that remains above the central bank's 2% target.

The Federal Open Market Committee (FOMC) made this decision unanimously, and it was broadly in line with market expectations. The Fed stated that its policy action will support a more timely return to its 2% objective for price stability.

Economic activity has continued to expand at a solid pace, with domestic spending remaining resilient despite uncertainty partly due to geopolitical developments. Strong productivity growth and solid capital investment have also been noted.