Federal Reserve is expected to raise its benchmark rate, defying Trump's demands
WASHINGTON — The Federal Reserve is widely expected to lift its short-term interest rate Wednesday for the first time in three years to fight stubbornly high inflation, a move that would put the central bank at odds with President Donald Trump's support for a cut. A quarter-point increase in the Fed's rate, currently about 3.6 percent, isn't guaranteed because Fed Chair Kevin Warsh doesn't…
The Federal Reserve is poised to raise its benchmark interest rate this week, marking the first increase in three years, in an effort to combat persistent high inflation, despite President Donald Trump's preference for a rate cut. The Federal Reserve's rate, currently sitting around 3.6 percent, may see a quarter-point increase, bringing it closer to the 4% level.
However, this move is not guaranteed as Fed Chair Kevin Warsh has not been providing clear signals about the bank's future actions. Warsh's stance on the matter was evident during a speech he delivered two weeks ago at the Fed's annual conference in Jackson Hole, Wyoming, where he argued that the Fed had not yet managed to curb inflation as per its 2% target.
This potential rate hike is set to occur amidst a turbulent economic period, with the Iran war resuming and causing significant spikes in oil and gas prices. The situation has led to inflation remaining elevated than the Fed's desired 2% mark for an extended period. "I don’t see any end to the war in Iran," Warsh remarked, reflecting the ongoing challenges faced by the central bank.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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