US Fed Hikes Rates for First Time Since 2023 Amid Inflation Concerns

The US Federal Reserve has raised interest rates by 25 basis points to combat stubbornly high inflation, marking its first rate hike since 2023. The decision was made unanimously by the Fed's Federal Open Market Committee, which cited 'elevated' inflation as the reason for the increase.

According to the central bank, the new target interest rate is between 3.75 and 4.00 per cent. This move is expected to support a 'timelier return' to the Fed's 2pc inflation target.

In a press conference following the decision, Federal Reserve Chair Kevin Warsh stressed that the rate hike was not influenced by financial markets, but rather by the central bank's assessment of the economic situation.

Warsh emphasized the importance of the Fed's independence and its focus on price stability. He noted that a majority of policymakers expect at least one more rate hike to be necessary before the end of the year.