US Fed Raises Benchmark Interest by 0.25%P to Target of 3.75%~4%
[International] : The U.S. Federal Reserve has raised its benchmark interest rate by 25 basis points to a target range of three-point-75 percent to four percent. Following two days of discussion, the Federal Open Market Committee on Wednesday announced the rate hike, the first increase in three years. The decision comes in ... [more...]
The U.S. Federal Reserve has increased its key interest rate for the first time since July 2023. The Federal Open Market Committee unanimously decided on a 0.25 percentage point hike, raising the federal funds rate target range to 3.75 to 4 percent. This move aims to curb resurgent inflation caused by the war in Iran. Twelve of the 18 policymakers indicated another quarter-point hike by the end of this year, while four proposed two more hikes, and two suggested keeping the rate at the new level.
The Fed, no longer on the rate-cut trajectory, now focuses on price stability rather than maximum employment. Despite economic activity expanding at a solid pace, inflation remains elevated, staying above the Fed's 2 percent target for over five years. The decision comes amid geopolitical tensions and rising consumer prices. Fed Chair Kevin Warsh, appointed by President Trump, emphasized the importance of price stability, stating that inflation has been too high and persistent for too long.
Trump, however, has called for lower interest rates, arguing that the U.S. is the best credit in the world.
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