Fed defies Trump, raises US interest rates for first time in three years

The US Federal Reserve has raised interest rates for the first time in three years, despite pressure from President Donald Trump to lower borrowing costs. The decision, which was widely expected, reflects persistently high inflation driven by rising oil prices. According to The Sydney Morning Herald and The Age, this was driven by tensions with Iran.

The rate increase, announced after a two-day meeting of the Federal Open Market Committee, took the federal funds target range from 3.50-3.75 percent to 3.75-4.00 percent. This move puts new Fed Chair Kevin Warsh at odds with President Trump's demands for lower rates, as reported by Newsweek.

The decision was unanimous, with officials signaling another rate hike to come, according to Quartz. Inflation remains above the Fed's 2 percent target, with higher energy prices adding to concerns about renewed price pressures, Newsweek said. The move could draw the ire of Donald Trump, weeks out from US midterm elections, the Financial Times noted.

Brief written by urgent.news from The Sydney Morning Herald, The Age, Quartz, Newsweek, Financial Times — 5 reports on this story. Machine-written — may contain errors; check the original before relying on it.