US Federal Reserve Hikes Interest Rate Amid Ongoing Inflationary Pressures

The US Federal Reserve raised its benchmark interest rate by 25 basis points on Wednesday, marking its first rate increase since July 2023. The move aims to combat persistent inflation and higher energy costs that have weighed heavily on the US economy.

The Federal Open Market Committee unanimously raised the federal funds target range to 3.75 percent, 4 percent, reversing the easing cycle that began in 2024.

The decision comes as the US economy faces renewed inflationary pressure from the ongoing US-Israel war with Iran, which has pushed up energy prices. Gasoline prices are averaging about $1 a gallon above last year's levels, while diesel recently reached a record $6.31.