US Interest Rates Rise for First Time in Over Three Years

US interest rates have been raised for the first time in over three years to combat rising prices. The Federal Reserve increased rates to 3.75%-4% from 3.5%-3.75%, despite opposition from President Donald Trump, who had called for rates to be cut.

The move is aimed at slowing inflation, which has been above the Fed's target of 2% for over five years. Fed Chair Kevin Warsh stated that 'inflation is too high and has been for too long', adding that it was a 'sober' and 'responsible decision'. Trump expressed support for Warsh but claimed the Fed board was 'hostile'.

The rate hike could make borrowing more expensive, particularly for those seeking mortgages or credit cards. However, it may lead to better returns on savings. The majority of policymakers believe rates will be hiked again before the end of this year and possibly rise further next year before cuts begin in 2028 and 2029.

The forecast suggests price rises will ease in the coming years, with inflation predicted to fall steadily to the Fed's target by 2029. The move is part of a global trend, as both the European Central Bank and the Bank of England have also raised interest rates recently.