US Fed Raises Interest Rate for First Time Since 2023 Amid Inflation Concerns

The US Federal Reserve has made its first interest rate hike since July 2023. The regulator raised the federal funds rate by 0.25 percentage points to a range of 3.75-4% per annum. This decision was taken amid concerns about high inflation.

Economic activity in the US is growing steadily, with resilient domestic spending and strong labour productivity growth. However, uncertainty remains due to geopolitical events. The unemployment rate has remained largely unchanged, and job growth is keeping pace with the growth in the labour force.

Fed Chair Kevin Worsh explained that inflation is too high and has persisted for too long. Most Fed officials expect another interest rate hike by the end of this year.