The Fed toughens the fight against inflation and raises the key interest rate for the first time in three years
The financial markets had been hoping for this interest rate move. However, with this step, the US Federal Reserve is setting a course of confrontation with Donald Trump, who is calling for lower interest rates.
The US Federal Reserve has raised its key interest rate by 0.25 percentage points to a range of 3.75 to 4 percent, its first increase in over three years and in President Donald Trump's second term. The move, which was widely expected by financial markets, is aimed at combating persistent inflation, which is currently running at 3.7 percent.
Fed Chairman Kevin Warsh had emphasized the importance of tackling inflation in recent public appearances, and the decision was made unanimously by the Fed's Open Market Committee. The rate hike may have political implications, particularly with the midterm elections approaching, as higher interest rates can slow economic growth and limit the government's fiscal flexibility.
Written by urgent.news from NZZ Wirtschaft's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
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