US Fed chair says inflation has been 'too high' for 'too long'

On September 16, the Federal Reserve raised interest rates in an effort to bring inflation down more quickly, with additional hikes expected throughout the year. Federal Reserve Chairman Kevin Warsh announced that the committee would raise the benchmark overnight interest rate by a quarter of a percentage point to the range of 3.75 to 4 percent.

This was the first policy shift under Warsh, who had previously been expected to lower rates. Warsh emphasized that inflation remains high and that today's action would help bring inflation back to the Federal Reserve's 2 percent goal more quickly. The decision came after the Fed's members grappled with stubbornly high inflation, driven by factors such as surging energy prices due to the Middle East conflict and the impact of global import tariffs.

The Fed increased its long-run expectation for the federal funds rate to 3.2 percent, and now anticipates higher inflation for the rest of the year. Financial markets reacted positively to the rate hike, with the US dollar strengthening and US Treasury bond yields holding steady. Market expectations for a rate increase at the Fed's next meeting in late October rose to 56.5 percent.