US Fed Raises Key Rate by 25 Basis Points to Combat Inflation

The US Federal Reserve (Fed) has raised its key interest rate for the first time in three years, aiming to combat stubbornly high inflation. The increase is a 25-basis-point hike, bringing the Fed's target rate to a range of 3.75% to 4.00%. This move comes as President Donald Trump has called for lower rates and nominated Kevin Warsh to the post of Federal Reserve Chair.

Warsh assured Congress during his confirmation process that central bank policymakers would 'have no tolerance for persistently elevated inflation.' He stated, 'Today's policy action will support a timelier return to the committee's 2% goal.'

The rate increase is expected to affect those who borrow money to make large purchases, such as homes or cars. The new rate will also raise monthly payments and costs for those already paying interest on credit card debt.